Fitch: Eastman Hill Funding I Remains on Rating Watch Evolving

NEW YORK--(Business Wire)--
Fitch Ratings has reviewed Eastman Hill Funding I Ltd./Inc. (Eastman Hill). The
litigation which led Fitch to place certain classes of notes of Eastman Hill on
Rating Watch Evolving is still ongoing and any interim court decisions, in
Fitch's opinion, have not removed the uncertainty of timely payments of interest
due to these classes. Accordingly, Fitch maintains the Rating Watch Evolving for
classes rated to timely receipt of interest. See the full list of ratings on all
six classes at the end of this press release.

The nature of the dispute which caused the court to order in December 2008 that
interest and principal be held in escrow accounts until court ordered
disbursement is described in Fitch's press release dated March 5, 2009. In
October 2009, the court ordered a portion of the funds held in escrow for the
Jan. 7, 2009, March 30, 2009, June 30, 2009, and Sept. 30, 2009 payments be
disbursed to the noteholders. The remaining portion of the collection proceeds
continued to be held in escrow. Further, the court did not order that any funds
be held in escrow for the Jan. 4, 2010 and March 30, 2010 payments, and all
funds collected for these two payments were distributed in their entirety under
the transaction's regular priority of payments.

Although the overall performance of the pro-rata classes A1-FL and A1-FX
(together class A1) since last review has been positive, with the notes having
delevered 37.9% since March 2009, Fitch rates this class to a timely receipt of
interest.

As of the date of this press release, the litigation is still in a discovery
stage and therefore the uncertainty regarding future timely distributions of
interest to classes A1 and A-2 remain.

Based on Fitch's review of the portfolio and results of Structured Finance
Portfolio Credit Model (SF PCM), the credit quality of the portfolio has
remained stable. For the purpose of this review, Fitch has not conducted its
cash flow model analysis as described in 'Global Criteria for Cash Flow Analysis
in CDOs - Amended'. Further, no Loss Severity Ratings are assigned to classes A1
and A-2 at this time.

Fitch expects to conduct a full-scope review when the dispute is definitively
resolved by the court.

Eastman Hill is a cash flow collateralized debt obligation (CDO) which closed on
July 2, 2001. The portfolio is monitored by TCW Asset Management Company. The
reinvestment period ended in June 2006. The portfolio is composed of corporate
bonds (62.1%), residential mortgage-backed securities (RMBS) (37.6%), and real
estate investment trusts (REITs) (0.3%).

The rating of the class A-2 notes addresses the likelihood that investors will
receive full and timely payments of interest on scheduled interest payment
dates. This rating does not address any distribution of principal.

Fitch has the following ratings:

--$119,912,527 class A1-FL Notes remain at 'B'; Rating Watch Evolving;

--$2,342,042 class A1-FX Notes remain at 'B'; Rating Watch Evolving;

--$122,254,569 class A-2 Notes remain at 'B'; Rating Watch Evolving;

Fitch has affirmed the following ratings:

--$10,000,000 class A-3 notes affirmed at 'CCC';

--$35,633,104 class B-1 notes affirmed at 'CC';

--$25,000,000 combination notes affirmed at 'C'.

Additionally, the Recovery Ratings ('RR') have been removed from the classes A1,
A-2, A-3, and class B-1 notes. Fitch currently does not assign Recovery Ratings
to notes issued by structured finance CDOs.

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);

--'Global Criteria for Cash Flow Analysis in CDOs - Amended' (Nov. 9, 2009).

Additional information is available at www.fitchratings.com.

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PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
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METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
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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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