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Fitch Rates Guggenheim Structured Real Estate Funding 2005-2, Ltd./LLC.

NEW YORK -- Fitch Ratings assigns the following ratings to Guggenheim Structured Real Estate Funding 2005-2, Ltd. (the issuer) and Guggenheim Structured Real Estate Funding 2005-2 LLC (the co-issuer, or together with the issuer, the co-issuers):

--$5,000,000 class S fixed-rate interest-only notes due 2010 'AAA';

--$163,800,000 class A floating-rate notes due 2030 'AAA';

--$31,300,000 class B floating-rate notes due 2030 'AA';

--$27,300,000 class C deferrable interest floating-rate notes due 2030 'A';

--$22,543,000 class D deferrable interest floating-rate notes due 2030 'BBB';

--$10,700,000 class E deferrable interest floating-rate notes due 2030 'BBB-';

--$10,000,000 Class F deferrable interest fixed-rate notes due 2030 'BB'.

The rating of the class S notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents. The ratings of the classes A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the classes C, D, E, and F notes address the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. Periodic payments on the notes will be paid monthly starting in September 2005.

The ratings are based upon the capital structure of the transaction, the credit quality of the collateral, and the overcollateralization (OC) and interest coverage (IC) tests provided for within the indenture. All of the collateral is expected to be purchased at closing. The collateral portfolio will be managed by Guggenheim Structured Real Estate Advisors, LLC (Guggenheim). The transaction has a reinvestment period of five years, beginning on the closing date, during which time Guggenheim may reinvest principal proceeds subject to the reinvestment criteria outlined in the governing documentation.

The proceeds of the notes will be used to purchase a portfolio of commercial real estate first mortgages, B-notes, Mezzanine loans, commercial mortgage-backed securities (CMBS), and a bank term loan. The reinvestment collateral is covenanted to a maximum Fitch loan diversity index test score of 869.6, in addition to other reinvestment parameters.

The class S interest-only notes are the most senior class of security within the structure and receive interest payments according to a fixed schedule before all other classes of notes. After the scheduled payments to the class S notes, available proceeds are applied to pay current interest to the notes in sequential order, beginning with the class A notes. During the reinvestment period, the collateral manager may opt to amortize the notes if investment in additional collateral interests is either infeasible or not beneficial, in which case the principal proceeds are then allocated to the noteholders on a pro rata basis. Furthermore, during the reinvestment period, Guggenheim will have a one-time option to liquidate the entire portfolio and apply the net proceeds of that sale to purchase collateral interests from an entity managed by the collateral manager, subject to the reinvestment criteria. After the reinvestment period, principal proceeds are paid sequentially to each of the classes A-F in amounts equal to their current class note balances as defined in the governing documentation.

The issuer and co-issuer are special-purpose companies incorporated under the laws of the Cayman Islands and Delaware, respectively. Guggenheim Structured Real Estate Advisors, LLC is a wholly owned subsidiary of Guggenheim Capital, LLC, a privately owned, diversified financial services company. Guggenheim Structured Real Estate Funding 2005-2 Ltd./LLC is the second collateralized debt obligation (CDO) managed by Guggenheim.

For additional information on structural and others features of this transaction, see the Fitch presale report, 'Guggenheim Structured Real Estate Funding 2005-2,' available on the Fitch web site, www.fitchresearch.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria, and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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Publication:Business Wire
Date:Aug 25, 2005
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