Fitch Affirms Anthracite 2006-HY3 Ltd./Corp.

NEW YORK--(BUSINESS WIRE)--Fitch has affirmed all classes of notes issued by Anthracite 2006-HY3 Ltd./Corp. (Anthracite 2006-HY3). These actions are the result of Fitch's review process and are effective immediately:

$174,765,558 Class A Notes affirmed at 'AAA';

$51,085,317 Class B-FL affirmed at 'AA';

$8,962,336 Class B-FX Notes affirmed at 'AA';

$42,122,981 Class C-FL Notes affirmed at 'A';

$7,169,869 Class C-FX Notes affirmed at 'A';

$12,547,271 Class D Notes affirmed at 'A-';

$49,292,850 Class E-FL Notes affirmed at 'BBB';

$4,481,168 Class E-FX Notes affirmed at 'BBB';

$23,302,074 Class F Notes affirmed at 'BBB-';

$41,122,981 Class G Notes affirmed at 'BB'.

Fitch does not rate the Preferred Shares.

Anthracite 2006-HY3 is a static collateralized debt obligation (CDO), which closed May 23, 2006. BlackRock Financial Management Inc. serves as the collateral manager and is currently rated 'CAM1' by Fitch.

The affirmations reflect the expected performance of the underlying collateral. The CDO is collateralized by 58 classes of fixed rate commercial mortgage backed-securities (CMBS) in 12 separate underlying transactions (CMBS: 74.66%) and six commercial real estate loans (CREL: 25.34%), consisting of three B-notes (9.98%) and three mezzanine loans (15.36%). Eight classes of CMBS, approximately 22.96% of the par value, represent first loss pieces within their respective transactions and one bond (1.21%) has a credit enhancement below 0.9%.

Based on the July 2007 trustee report, the CDO has paid down $49.1 million (7.6%) since issuance reducing the balance of classes A through G, with no losses experienced to date. The capital structure employs both sequential and pro rata principal payment structure. On each payment date, CMBS principal proceeds will be paid sequentially to each class of notes. The proceeds from the B-note and mezzanine debt collateral will be applied pro rata prior to an event of default or as long as there is greater than 50% of effective date collateral balance. Otherwise, the proceeds will be applied sequentially. Of the CREL assets in the pool at closing, four have paid down completely.

The weighted average rating factor (WARF) has remained stable in the 'B/B-' category since issuance. The CMBS assets in the collateral pool range from the 2002 vintage to the 2006 with approximately two years of seasoning. There are currently no defaulted assets in the portfolio.

Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities.

The rating of the class A, B-FX, and B-FL notes addresses the likelihood that investors will receive timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C, D, E, F and G notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at www.derivativefitch.com. (For more information on the Fitch VECTOR model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Oct. 4, 2006 and also available on Fitch's web site at www.derivativefitch.com.)

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.derivativefitch.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 means Fitch, Inc., Fitch Ratings, Ltd. And their subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any successor or successors thereto.