Fitch Downgrades 5 Classes of Fort Point Funding CDO II Ltd.

NEW YORK--(Business Wire)--
Fitch has downgraded and removed from Rating Watch Negative five
classes of notes issued by Fort Point Funding CDO II Ltd. and Fort
Point Funding CDO II Corp. (Fort Point II). These rating actions are
the result of Fitch's review process and are effective immediately:

--$320,015,455 Class A-1 Notes downgraded to 'BB' from 'AAA';

--$60,000,000 Class A-2 Notes downgraded to 'CCC' from 'A';

--$38,750,000 Class A-3 Notes downgraded to 'CC' from 'BBB';

--$12,883,697 Class B Notes downgraded to 'C' from 'BB+';

--$12,954,756 Class C Notes downgraded to 'C' from 'BB'.

Fitch's rating actions reflect the collateral deterioration within
the portfolio, specifically subprime residential mortgage backed
securities (RMBS) and structured finance (SF) collateralized debt
obligations (CDO) with underlying exposure to subprime RMBS.

Fort Point II is a cash flow CDO, which closed in October 2003 and
has a portfolio that was initially selected by State Street Research
and is now managed by BlackRock Financial Management. The
transaction's revolving period ended in November 2007. Presently,
32.9% of the portfolio is comprised of 2005, 2006 and 2007 vintage
U.S. subprime RMBS, 9.6% is comprised of 2005, 2006, and 2007 vintage
U.S. Alternative-A (Alt-A) RMBS, and 23.5% consists of pre-2005 and
2005 vintage U.S. SF CDOs.

Since the last rating action in November 2007, 46.3% of the
portfolio has been downgraded with an additional 15.7% of the
portfolio currently on Rating Watch Negative. Approximately 41.7% of
the portfolio is now rated below investment grade, of which 23.6% is
rated 'CCC+' and below. As per the latest Trustee report dated July
30th, 2008, defaulted and deferred interest PIK securities constitute
10.2%, or $47.86 million, of the portfolio total. The negative credit
migration experienced since the last review has resulted in the
Weighted Average Rating Factor deteriorating to 'BB+/BB' from
'BBB/BBB-' during the last review, breaching its covenant of
'BBB/BBB-', as of the latest trustee report.

The collateral deterioration has caused each of the
overcollateralization (OC) ratios to fall below 100% and fail their
respective tests. As of the latest trustee report, the class A OC
ratio was 97.0%, the class B OC ratio was 94.2%, and the class C OC
ratio was 91.4% versus triggers of 106.0%, 104.0%, and 100.2%,
respectively. Class A-1, A-2, and A-3 are receiving interest payments
and all other interest and principal proceeds are then used to redeem
class A-1 principal due to coverage test failures. Classes B and C are
receiving interest payments in kind whereby the principal balance is
written up by the amount of interest owed. Fitch sees little prospect
of any principal recovery for class B and class C.

The ratings of the class A-1 notes, class A-2 notes, and class A-3
notes address the likelihood that investors will receive full and
timely payments of interest, as per the governing documents, as well
as the stated balance of principal by the legal final maturity date.
The ratings of the class B notes and class C notes address the
likelihood that investors will receive ultimate and compensating
interest payments, as per the governing documents, as well as the
stated balance of principal by the legal final maturity date. The
ratings are based upon the capital structure of the transaction, the
quality of the collateral, and the protections incorporated within the
structure.

Fitch is reviewing its SF CDO approach and will comment separately
on any changes and potential rating impact at a later date. Fitch will
continue to monitor and review this transaction for future rating
adjustments. Additional transaction information and historical data
are available on the Fitch Ratings web site at www.fitchratings.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.

Fitch Ratings
Brian Vorderbrueggen, +1-212-908-9102 (New York)
Kevin Kendra, +1-212-908-0760 (New York)
Julian Dennison, +44 020 7682 7480
(Media Relations, London)
Sandro Scenga, +1-212-908-0278
(Media Relations, New York)

Copyright Business Wire 2008