Fitch Downgrades 4 & Affirms 2 Classes of Acacia CDO 8

CHICAGO--(Business Wire)--
Fitch Ratings has downgraded four and affirmed two classes of notes issued by
Acacia CDO 8, Ltd./Corp. (Acacia 8) as a result of continued credit
deterioration in the portfolio since Fitch's last rating action in February
2009. Approximately 77.3% of the portfolio has been downgraded since the last
review. The details of the rating action follow at the end of this press
release.

The downgrades to the portfolio have left approximately 90.2% of the portfolio
(including defaults) with a Fitch derived rating below investment grade and
75.9% with a rating in the 'CCC' rating category or lower, compared to 68.9% and
34.7%, respectively at last review. Defaulted securities, as defined in the
transaction's governing documents, now comprise 58.6% of the portfolio, compared
to 9.7% at last review. The current balance of the portfolio is $217.5 million
including $127.4 million defaulted securities.

While the classes A-1, A-2, and B notes are still receiving timely interest
distributions, Fitch believes that default is inevitable for these classes. The
transaction entered an Event of Default on June 22, 2009 when the class A/B
overcollateralization test fell below 100%. Noteholders had not given direction
to accelerate the notes at the time of this review.

This review was conducted under the framework described in the report 'Global
Rating Criteria for Structured Finance CDOs' using the Portfolio Credit Model
(PCM) for projecting future default levels for the underlying portfolio. Due to
the significant collateral deterioration, credit enhancement levels available to
all classes of notes are exceeded by the 'CCC' rating loss rate, the lowest
rating level loss projected by PCM. Fitch compared the respective credit
enhancement levels to the amount of underlying assets considered distressed
(rated 'CCC' and lower). Given the high probability of default of these assets
and the expected low recoveries upon default, classes A-1, A-2, B, and C were
downgraded to 'C' and classes D and E were affirmed at 'C' rating.

Acacia 8 is a structured finance collateralized debt obligation (SF CDO) that
closed on July 14, 2005 and is monitored by Redwood Asset Management. The
portfolio is composed of RMBS (76.7%), CDOs (1.9%), and commercial
mortgage-backed securities (21.4%).

Fitch has taken various actions on the following classes of Acacia CDO 8,
Ltd./Corp. as indicated:

--$131,066,144 class A-1 notes downgraded to 'C' from 'BBB-';

--$15,000,000 class A-2 notes downgraded to 'C' from 'BB';

--$22,000,000 class B notes downgraded to 'C' from 'B';

--$20,504,067 class C notes downgraded to 'C' from 'CC';

--$10,414,507 class D notes affirmed at 'C';

--$10,572,477 class E notes affirmed at 'C'.

Fitch does not assign Rating Outlooks to classes rated 'CCC' or lower. The
Rating Outlooks for classes A-1, A-2, and B were Negative prior to today's
downgrades.

These rating actions reflect the application of Fitch's current criteria which
are available at 'www.fitchratings.com' and specifically include the following
reports:

--'Global Structured Finance Rating Criteria' (Sept. 30, 2009);

--'Global Rating Criteria for Structured Finance CDOs' (Dec. 16, 2008).

Additional information is available at www.fitchratings.com.

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Fitch Ratings
Alina Pak, 312-368-3184, Chicago
Kevin Kendra, 212-908-0760, New York
or
Media Relations:
Sandro Scenga, 212-908-0278, New York
Email: sandro.scenga@fitchratings.com

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