Fitch Downgrades One Class of Porter Square CDO I, Ltd./Inc.

Fitch Ratings has downgraded one class of Porter Square CDO I, Ltd./Inc. (Porter Square) as follows:

--$21,993,286 class C notes to 'Dsf' from 'Csf';

Fitch does not rate the Preference Shares.

KEY RATING DRIVERS

Fitch's downgrade of the class C notes reflects an event of default occurring on the Aug. 15, 2016 payment date as a result of a default in the payment of interest due and payable on the class C notes. The defaulted rating on the class C notes will be withdrawn within 11 months.

The class B notes were paid in full on the Feb. 16, 2016 payment date, causing the class C notes to be the senior most class of notes outstanding. Prior to the Feb. 16, 2016 payment date, the class C notes had been accruing interest since the payment date in February 2008. The transaction continues to be significantly undercollateralized and there are not enough interest proceeds to pay the senior administrative expenses and investment advisory fee, which are payable prior to class C interest in the interest waterfall. Any principal proceeds available after the payment of unpaid senior administrative expenses and the investment advisory fee will be applied towards the principal balance of the class C notes in the principal waterfall. Fitch does not expect the class C notes to receive any future payments towards interest and minimal principal recoveries are expected.

RATING SENSITIVITIES

The underlying portfolio is not expected to generate enough interest proceeds to pay interest due on the class C notes. Further, given the degree by which the class C notes are undercollateralized Fitch does not expect the class C noteholders to receive meaningful principal distributions by their legal maturity. As a result, Fitch expects the class C notes to remain in default until the ratings are withdrawn.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

No third party due diligence was reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com.

Sources of Information:

The sources of information used to assess these ratings were periodic trustee reports and the public domain.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)

https://www.fitchratings.com/site/re/884963

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/site/re/883130

Global Surveillance Criteria for Structured Finance CDOs (pub. 05 Jul 2016)

https://www.fitchratings.com/site/re/883201

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1010756

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1010756

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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