OREANDA-NEWS. Fitch Ratings has downgraded Glastonbury 2007-1 Plc notes, as follows:

Class B (XS0292543112): downgraded to 'Dsf from 'BBsf'; withdrawn
Class C (XS0292543468): downgraded to 'Dsf' from 'Bsf'; withdrawn
Class D (XS0292543542): downgraded to 'Dsf' from 'Csf'; withdrawn
Class E (XS0292543898): d downgraded to 'Dsf from 'Csf'; withdrawn
Class F (XS0292543971): downgraded to 'Dsf' from 'Csf'; withdrawn

Glastonbury Finance 2007-1 P.L.C. was a managed cash arbitrage securitisation of predominantly CMBS assets. The issuer was incorporated as a special-purpose vehicle to issue approximately GBP354m of floating-rate and subordinated notes. The collateral was actively managed by Palatium Investment Management.

KEY RATING DRIVERS
The downgrades and withdrawals reflect the partial payments and cancellation of all classes of notes on 30 March as a result of an agreement between noteholders and other transaction party participants. The agreement's proposal to accelerate the repayment of the outstanding classes was passed after receiving at least 75% or more votes from noteholders of each of the outstanding classes. As part of the agreement, voting noteholders agreed to a modified pro rata distribution of proceeds. Following the underlying portfolio's resolution, which produced proceeds sufficient to meet minimum agreed threshold amounts, these proceeds were distributed accordingly. As per the agreement, recoveries did not flow sequentially down the structure, and instead all classes of notes, while receiving principal, suffered a partial loss before being subsequently cancelled.

The class B and C noteholders agreed to a repayment of less than par. At the last review Fitch upgraded these notes based on improved asset performance and deleveraging. In Fitch's view the notes had a reasonable chance of receiving par at maturity. However based on the long dated maturity profile of some of the remaining assets in the portfolio, these notes may not have been repaid for some time.

As a result of the modified pro rata payments, Fitch has revised to 'Dsf' and withdrawn all outstanding note ratings.