Moody's cuts ratings assigned to Notes issued by Montrose

(The following statement was released by the rating agency)

May 19 - Moody's Investors Service announced today that it
has downgraded the ratings of six classes of notes issued by
Montrose Harbor CDO I, Ltd., and left on review for possible
further downgrade rating of one of these classes of notes as
follows:
Class Description: U.S.$342,500,000 Class A-1 First Priority
Senior Secured Floating Rate Notes Due 2051
Prior Rating: A1, on review for possible downgrade
Current Rating: B3, on review for possible downgrade
Class Description: U.S.$52,500,000 Class A-2 Second Priority
Senior Secured Floating Rate Notes Due 2051
Prior Rating: Ba2, on review for possible downgrade
Current Rating: C
Class Description: U.S.$35,000,000 Class B-1 Third Priority
Secured Floating Rate Notes Due 2051
Prior Rating: Caa1, on review for possible downgrade
Current Rating: C
Class Description: U.S.$13,750,000 Class B-2 Fourth Priority
Secured Floating Rate Notes Due 2051
Prior Rating: Ca
Current Rating: C
Class Description: U.S.$14,500,000 Class C Fifth Priority
Mezzanine Deferrable Secured Floating Rate Notes Due 2051
Prior Rating: Ca
Current Rating: C
Class Description: U.S.$21,250,000 Class D Sixth Priority
Mezzanine Deferrable Secured Floating Rate Notes Due 2051
Prior Rating: Ca
Current Rating: C
Montrose Harbor CDO I, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of structured finance securities.
On November 29, 2007 the transaction experienced an event of
default caused by a failure of the Net Outstanding Portfolio
Collateral Balance to be greater than or equal to the required
amount set forth in Section 5.1(i) of the Indenture dated July
31, 2006. That event of default is continuing. Also, Moody's has
received notice from the Trustee that it has been directed by a
majority of the controlling class to declare the principal of and
accrued and unpaid interest on the Notes to be immediately due
and payable.
The rating actions taken today reflect continuing deterioration
in the credit quality of the underlying portfolio and the
increased expected loss associated with the transaction. Losses
are attributed to diminished credit quality on the underlying
portfolio.
As provided in Article V of the Indenture during the occurrence
and
continuance of an Event of Default, the Controlling Class may be
entitled to direct the Trustee to take particular actions with
respect to the Collateral. The severity of losses may depend on
the timing and choice of remedy to be pursued by the Controlling
Class. Because of this uncertainty, the rating of Class A-1 Notes
issued by Montrose Harbor CDO I, Ltd. is on review for possible
further action.