Fitch Ratings-London-19 March 2010: Fitch Ratings has today affirmed Melepard CLO 1 Limited's (Melepard) class A at 'AAA' with Stable Outlook and assigned a Loss Severity (LS) Rating of 'LS-2'.

The affirmation reflects the consistent credit quality of the portfolio, as well as the available credit enhancement in the structure. The transaction is in compliance with portfolio guidelines and satisfies all coverage tests. The credit quality is stable with a current weighted average rating factor (WARF) of 33.3 compared to 35.05 at closing in January 2009, both WARFs being equivalent to a 'B'/'B-' rating. Approximately 2.2% of the collateral is loans to 'CCC'-rated corporate entities. There have been no reported defaults by the servicer since closing.

The transaction is characterised by significant reliance on Bank of Ireland (BoI) (rated 'A-'/Outlook Stable/'F1') as a key transaction counterparty that currently benefits from guarantees from the Irish government which are due to expire in September 2010. As reported in the 23 February 2010 comment entitled 'Fitch: Expiry of Irish Bank Guarantees May Negatively Impact Some SF/Covered Bond Rtgs' Fitch expects the issuer to take mitigating actions well before the expiry of the Irish government guarantees to BoI.

Fitch expects the transaction to continue to perform well. Whilst the transaction could be exposed to portfolio level defaults, Fitch expects the 'AAA' rating to be stable. Current credit enhancement level (approximately 39%) is expected to comfortably absorb moderate losses without resulting in a downgrade of the 'AAA' notes.

The agency has today assigned Issuer Report Grades (IRGs) of "basic" (two stars) to Melepard. Reporting characteristics that prevent the transactions from earning IRGs higher than "basic" include low reporting frequency of semi-annually and portfolio asset by asset information not being provided.Applicable criteria 'Global Structured Finance Rating Criteria', dated 30 September 2009, 'Global Rating Criteria for Corporate CDOs', dated 30 April 2008, 'Global Criteria for Cash Flow Analysis in Corporate CDOs', dated 9 November, 2009, 'Global Surveillance Criteria for Corporate CDOs', dated 7 December 2009, 'Counterparty Criteria for Structured Finance Transactions', dated 22 October 2009, and 'Criteria for European Structured Credit Issuer Report Grades', dated 16 February 2010, are available on www.fitchratings.com.

Contacts: Laurent Chane-Kon, London, Tel: +44 (0) 20 7682 7549; Carol Pang, CFA, Tel: +44 (0) 20 7682 7309.

Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email: julian.dennison@fitchratings.com.

EMEA Structured Finance Snapshot:Further information on Fitch's EMEA structured finance offering can be found in "EMEA Structured Finance Snapshot", which is available at www.fitchratings.com. The Snapshot consolidates and highlights the key research and commentary produced by the agency's EMEA structured finance group and includes previously unpublished Fitch data and multimedia content that will be updated each quarter.

Additional information is available at www.fitchratings.com.

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