fn 1462 - 1576

SubjectRe: Fw: ******URGENT**********
yes sure, but i think we should keep those requests separate from the CDO warehouse valuation requests... the relevant salesperson can take care of those monthly valuation marks... let me know how you want to proceed.
Richard R Kim/NewYork/DBNA/DeuBa
03/27/2007 01:43 PM
Permanent Subcommittee on Investigations
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSU Report Footnote #1462 DBSI_00423053
DBPSI_00423053
SUbjectRe: Fw: *· .... URGENT· .. • .. ••••
yes sure, but i think we should keep those requests separate from the CDO warehouse valuation requests ... the relevant salesperson can take care of those monthly valuation marks ... let me know how you want to proceed.
Richard R Kim/NewYork/DBNA/DeuBa
03/27/2007 01:43 PM
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSUA1\ Report Footnote #1462 DBSI_00423053
DB_PSL00423053
cc
Subject
Kamat)
CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER DBSI_00423054
DBPSI_00423054
DB_PSI_00423054
won't our managers want to receive monthly marks for their own monitoring purposes?
DBPSI_00423055
Footnote Exhibits - Page 2167
won't our managers want to receive monthly marks for their own monitoring purposes?
DB PSI_00423055
Abhayad Kamat/NewYork/DBNA/DeuBa
03/27/2007 01:29
DBPSI 00423056
DB PSL00423056
DBPSI_00423057
Subject
DB PSI_00423057
when our CDOs close, we need to convey to valuations group that we no longer need these valuations. see eg. Gemstone 7 below. they still keep pushing trading desk to give valuations... pls can you take care of this for the deals that you work on?
thanks.
Richard Leclezio/NewYork/DBNA/DeuBa
DBPSI_00423058
when our CDOs close, we need to convey to valuations group that we no longer need these valuations. see ego Gemstone 7 below. they still keep pushing trading desk to give valuations ... pls can you take care of this for the deals that you work on?
thanks.
Richard Leclezio/NewYork/DBNA/DeuBa
DB_PS'_00423058
DBPSI_00423059
cc
Subject
CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER DBSI _ 00423059
DB_PSI_00423059
****** URGENT**********
DBPSI_00423060
a
•
CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER DESI 00423060
DB_PSI_00423060
Please can you help,
I have HBK on my back to get the following spreads.
Please can you provide the parameters ....... tks
[attachment "JordanMilman daily requests 20070326.xls" deleted by Richard R Kim/NewYork/DBNA/DeuBa]
Richard Leclezio Assistant Vice President Valuation Services Group . Redacted by the Permanent Deutsche Bank [/] - New York I Subcommittee on Investigations (t) +1 212 250 2485 (m) +1 646 Email: [email protected] BBG: [email protected] _______________________________________________
DB_PSI_00423061
Please can you help.
I have HBK on my back to get the following spreads.
Please can you provide the parameters ....... tks
[attachment "Jordan "Milman daily requests 20070326.xls" deleted by Richard R Kim/NewYork/DBNA/DeuBaJ - - -
Richard Leclezio Assistant Vice President Valuation Services Group Deutsche Bank [/J - New York (t) +1 212 250 2485
_ WI Redacted by the Permanent Subcommittee on Investigations
(m) +1 646 _ •• _ Email: [email protected] BBG: [email protected]
DB_PSL00423061
From: Paul Mazzilli Sent: Thursday, February 8, 2007 08:12:59 AM To: Kevin Jenks CC: Jason Lowry Subject: FW. Gemstone CDO 7 - price diff between purchase price and current mark
Attachments: Prices to Kevinxls
We found the overall loss to be down 0.9% or $9.4mm.
-- Original Message- From: Paul Mazzilli Sent Wednesday, January 24, 2007 12:44 PM To: Kevin Jenks Cc: Jason Lowry Subject: RE: Gemstone CDO 7 - price diff between purchase price and current mark
We see the whole portfolio down 0.9% or $9.4mm compared to DBS's 1.7%($19mm). Attached is DBS's email with our prices included.
---Original Message-- From: Kevin Jenks Sent Wednesday, January 24, 2007 4:27 AM To: Paul Mazzilli; Jason Lowry Subject: Fw: Gemstone CDO 7 - price diff between purchase price and current mark
I need the gem 7 portfolio priced using our ye marks and then override where you think appropiate. I need this asap
--- Original Message- From: Abhayad Kamat To: Marco Lukesch; Kevin Jenks; Rachel Wish Cc: Chehao Lu; Sourav Sen; Konstantin Kulev <[email protected]> Sent: Tue Jan 23 20:16:50 2007 Subject: Gemstone CDO 7 - price diff between purchase price and current mark
Some investors are asking for current marks on the Gemstone CDO 7 portfolio. The attached file has the purchase price and the current marks that we got from our desk. There are many bonds where the price difference between purchase price and current mark is more than 4% - highlighted in yellow. I have asked Jordan to review the marks but it would be great if you could have someone at HBK review also to check if the current marks seem correct. It seems as if the entire portfolio price has dropped since purchase by 1.74% which does not show well to investors.
thanks. Abhayad
Abhayad Kamat Global CDO Group I __ _ -Retted by the Permanent Deutsche Bank Securities Inc. - Subcommitteeon IvstiU6tio0 S 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (9117incell (732) 578-2890 fax
This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or
Confidential Treatment GEM7-000031 01
Kevin Jenks
Jason Lowry
FW: Gemstone COO 7 - price diff between purchase price and current marl<
Prices to Kevin.xls
We found the overall loss to be down 0.9% or $9.4mm.
--Original Message From: Paul Mazzilli Sent Wednesday, January 24, 2007 12:44 PM To: Kevin Jenks Cc: Jason Lowry Subject: RE: Gemstone COO 7 - price diff between purchase price and current mark
We see the whole portfolio down 0.9% or $9.4mm compared to DBS's 1.7%($19mm). Attached is DBS's email with our prices included.
---Original Message- From: Kevin Jenks Sent: Wednesday, January 24, 2007 4:27 AM To: Paul Mazzilli; Jason Lowry Subject: Fw: Gemstone COO 7 - price cliff between purchase price and current mark
I need the gem 7 portfolio priced using our ye marks and then override where you think appropiate. I need this asap
--- Original Message - From: Abhayad Kamat To: Marco Lukesch; Kevin Jenks; Rachel Wish Cc: Chehao Lu; Sourav Sen; Konstantin Kulev <[email protected]> Sent: Tue Jan 23 20:16:502007 Subject: Gemstone COO 7 - price diff between purchase price and current mark
Some investors are asking for current marks on the Gemstone COO 7 portfolio. The attached file has the purchase price and the current marks that we got from our desk. There are many bonds where the price difference between purchase price and current mark is more than 4% - highlighted in yellow. I have asked Jordan to review the marks but it would be great if you could have someone at HBK review also to check if the current marks seem correct. It seems as if the entire portfolio price has dropped since purchase by 1.74% which does not show well to investors.
thanks. Abhayad
Abhayad Kamat Global COO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work
-- Redacted by the Permanent Subeolllmittee on Investigations
(917) cell (732) 578-2890 fax
This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or
Confidential Treatment Request~-""""IIiiiIIIIIiIiI"' __ -- GEM7-00003101
Abhayad KamatINewYork/DBNA/DeuBa@DBAMERICAS
bcc SubjectHBK -price diff between purchase price and
current mark
The attached file has the purchase price and current mark for the bonds in the HBK / Gemstone CD0 7 warehouse.
There are many bonds where the price difference between purchase price and current mark is more than 4% -- highlighted in yellow. Before we send these over to CDO investors, pls could you review to check if the current marks are correct. It seems as if the entire portfolio price has dropped since purchase by 1.74% which does not show well to investors.
thanks.
(See attached file: Gemstone VII Portfolio 01.23.07 (w Prices).xls)
Abhayad Kamat Global CDO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917) _ cell (732) 578-2890 fax
I - Redacted by the Permanent l Subeormittee on Investigations
: Gemstone VII Portfolio 01.23.07 (w Prices).xs T e: applicaionmsecel ..J uName: Gemstone VII Portfolio 01.23.07 (w Prices).xls
~~~~~~~~~~;:...... ...... ... . .. ...... .... ... ........ . . ... ... o. ..... ...mo ;:: ...... ... .... . . . ......... ....... .. .......... .. ...
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSUANT Report Footnote #1465 DBSI_00465462
DBPSI_00465462
SenJNewYorkIDBNAIDeuBa bcc
SubjectHBK - price diff between purchase price and current mark
The attached file has the purchase price and current mark for the bonds in the HBK / Gemstone CDO 7 warehouse.
There are many bonds where the price difference between purchase price and current mark is more than 4% -- highlighted in yellow. Before we send these over to CDO investors, pIs could you review to check if the current marks are correct. It seems as if the entire portfolio price has dropped since purchase by 1.74% which does not show well to investors.
thanks.
(See attached file: Gemstone VII Portfolio 01.23.07 (w Prices) .xls)
Abhayad Kamat Global CDO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917) cell (732) 578-2890 fax
CONFIDENTIAL - PRODUCED TO M&T PURSUANT
_... Redacted by tbe Permanent Subcommittee on Investigations
DB_PSI_00465462
SubjectFw: HBK - price diff between purchase price and current mark
I checked the names Abhayad highlighed are most are marked within the context of recent color
there are 4 which should be tightened.
there's one cash bond which he highlighted... HEAT 2006-7 Bl: we just offered prot at 465;
you had a cash bid of 94-00 (362DM at 10OPPC) for Fidelity in late October
(See attached file: Gemstone VII Portfolio 01.23.07 (w Prices) JP.xls)
Jashin Patel Securitized Product Group Trading
Deutsche Bank Securities Inc.
212 250 7730 (t)
01/23/2007 08:14
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSUA Report Footnote #1466 DBSI_00843917
DBPSI_00843917
current mark
I checked the names Abhayad highlighed are most are marked within the context of recent color there are 4 which should be tightened.
there's one cash bond which he highlighted ... HEAT 2006-7 B1: we just offered prot at 465; you had a cash bid of 94-00 (362DM at 100PPC) for Fidelity in late October
(See attached file: Gemstone VII Portfolio 01.23.07 (w prices)_JP.xls)
Jashin Patel Securitized Product Group Trading Deutsche Bank Securities Inc. 212 250 7730 (t) ----- Forwarded by Jashin Patel/NewYork/DBNA/DeuBa on 01/24/2007 12:46 PM
01/23/2007 08: 14 PM
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSUAl- Report Footnote #1466 DBSI_00843917
DB PSI_00843917
mark
DBPSI_00843918
DB_PSI_00843918
The attached file has the purchase price and current mark for the bonds in the HBK / Gemstone
CDO 7 warehouse.
There are many bonds where the price difference between purchase price and current mark is more than 4% -- highlighted in yellow. Before we send these over to CDO investors, pls could
DBPSI_00843919
The attached file has the purchase price and current mark for the bonds in the HBK I Gemstone CDO 7 warehouse.
There are many bonds where the price difference between purchase price and current mark is more than 4% -- highlighted in yellow. Before we send these over to CDO investors, pls could
DB PSI 00843919
you review to check if the current marks are correct. It seems as if the entire portfolio
price has dropped since purchase by 1.74% which does not show well to investors.
thanks.
[attachment "Gemstone VII Portfolio 01.23.07 (w Prices).xls" deleted by Jashin
Patel/NewYork/DBNA/DeuBa]
__________________________
Abhayad Kamat Global CDO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work
(917)% _ cell (732) 578-2890 fax
I - - Redacted by the Permanent Subcommittee on Investigations
* Gemstone VII Portfolio 01.23.07 (w Prices .Type: application/msexcel Name: Gemstone VII Portfolio 01.23.07 (w Prices)
JP.xls _JP.xls - ,,,..........,,..,....... ...
DBPSI_00843920
Footnote Exhibits - Page 2179 you review to check if the current marks. are correct. It seems as if the entire portfolio price has dropped since purchase by 1.74% which does not show well to investors.
thanks.
[attachment "Gemstone VII Portfolio 01.23.07 (w Prices).xls" deleted by Jashin Patel/NewYork/DBNA/DeuBaj
Abhayad Kamat Global coo Group Deutsche Bank Securities Inc. 60 Wall ~treet, 19th Floori New York, NY 10005-2858 (212) 250~0526 work (917) cell (732) 578-2890 fax
t~J. Gemstone VII Portfolio 01.23.07 (w Prices)
lP.xls
Type: application/msexcel Name: Gemstone VII Portfolio 01.23.07 (w Prices) _lP.xls
DB_PSI_00843920
cc bec
SubjectRe: We priced the port
for investors who have asked for current marks on the Gemstone CDO 7 portfolio, tell them: HBK says
that the overall current portfolio is down USD 9mm. no need to provide current prices on a line item level.
"Kevin Jenks' <kjenks@hbk. corn>
DBPSI_00741750
ee bee
SubjectRe: We priced the port
for investors who have asked for current marks on the Gemstone COO 7 portfolio, tell them: HBK says that the overall current portfolio is down USD 9rnm. no need to provide current prices on a line item level.
"Kevin Jenks" <[email protected]~
01/24/2007 01:14 PM
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSUN- Report Footnote #1468 DBSI_0074 1750
DB_PSI_00741750
cc
DBPSI_00741751
cc
Subject
DBPSI_00741752
It is down 9mm
CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER DBSI_0074 1752
DB_PSI_007417S2
Can you ask him.. We need him to provide
Abhayad Kamat/NewYork/DBNA/DeuBa@DBAMERICAS
DBPSI_00434692
02/07/2007 12:55 PM
Abhayad Kamat/NewYork/DBNA/DeuBa@DBAMERICAS
02/07/2007 12:54
Ilinca R
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSUAl Report Footnote #1469 DBSI_00434692
DB_PSI_00434692
Subject
Re: Fw: Gemstone CDO 7 - portfolio mark(Document link: Ilinca R Bogza)
DBPSI_00434693
Re: £'vI: Gemstone
DB _PSI_ 00434693
the marks we got from jordan are too low... and it will take quite some time if we try to take on an exercize where we try to get kevin and jordan to agree on the correct marks. so alternatively we ask kevin to provide us the detailed marks. worth asking.
Ilinca R Bogza/NewYork/DBNA/DeuBa ODBAMERICAS
DBPSI_00434694
the marks we got from jordan are too low ... and it will take quite some time if we try to take on an exercize where we try to get kevin and jordan to agree on the correct marks. so alternatively we ask kevin to provide us the detailed marks. worth asking.
Ilinca R Bogza/NewYork/DBNA/DeuBa@DBAMERICAS
02/07/2007 12:52 PH
To
DBSI_00434694
DB_PSL00434694
cc
Subject
DBPSI_00434695
Fw: Gemstone eDO 7 -
DBSI 00434695
DB PSL00434695
Why can we not show a priced portfolio?? we need to show this
----- Forwarded by Ilinca R Bogza/NewYork/DBNA/DeuBa on 02/07/2007 12:52 PM -----
Abhayad Kamat/NewYork/DBNA/DeuBa@DBAMERICAS 02/07/2007 12:51 PM
To kjenkshbk.com, [email protected], [email protected] cc Ilinca R Bogza/NewYork/DBNA/DeuBa@DBNA@DEUBAINT, Chehao Lu/NewYork/DBNA/DeuBa Subject Gemstone CDO 7 - portfolio mark
__________________________
Abhayad Kamat Global CDO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917))cell (732) 578-2890 fax
the Gemstone CDO
I _ - Redacted by the Permanent Subcommittee on Investigation|
I, CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER DBSI_00434696
DBPSI_00434696
Why can we not show a priced portfolio?? we need to :ohow this
_____ Forwarded by Ilinca R Bogza/Ne,,,York/DBNA/DeuBa on 02/07/2007 12: 52
J;'M -----
Lu/NewYork/DBNA/DeuBa Subject Gemstone CDO 7 - portfolio mark
Kevin, what is the overall gain/loss (based on current marks) on the Gemstone CDO
7 portfolio?
-------------------------- Abhayad Kamat Global CDO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858
_. Redacted by the Penn8Dent Sulleommittee on Investigations
(212) 250-0526 work (917) cell (732) 578-2890 fax
DB_PSI_00434696
Can we include that in the disclaimer?
Abhayad Kamat/NewYork/DBNA/DeuBa@DaPMERICAS
02/07/2007 02:14
DBPSI_00711486
Abhayad Kamat/NewYork/DBNA/DeuBa@DBJlMERICAS
cc
Wall Street & The Financial Crisis CONFIDENTIAL - PRODUCED TO M&T PURSUN Report Footnote #1470
To
Chehao
DBPSI_00711487
pricing
Fw: New simpler
DBSI_00711487
DB_PSI_00711487
use this for the current prices to be sent to investors, but pls note to investors that this is frm hbk.
Abhayad Kamat Global CDO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917) cell (732) 578-2890 fax ----- Forwarded by Abhayad Kai
I -. - Redacted by the Permanent Subcommittee on InvestigationsI
.nat/NewYork/DBNA/DeuBa on 02/07/2007 02:13 PM -----
"Kevin Jenks" <[email protected]>
PM 02/07/2007 02:06
DBPSI_00711488
use this for the current prices to be sent to investors, but pIs note to investors that this is frm hbk.
Abhayad Kamat Global COO Group Deutsche Bank Securities Inc. 60 Y,all Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917) cell (732) 578-2890 fax
_... Redaded by tbe Permanent Subcommittee on Investigations
Forwarded by Abhayad Kamat/NewYork/DBNA/DeuBa on 02/07/2007 02:13 PM -----
"Kevin Jenks" <[email protected]>
02/07/2007 02:06 PM
To
Abhayad
DBSI_00711488
DB_PSI_00711488
cc
Subject
pricing
New simpler
New simpler
DBSI _ 00711489
DB PSI_00711489
[attachment "Pricing of gem 7.xls" deleted by Ilinca R Bogza/Ne-WYork/DBNA/DeuBa]
DBPSI_00711490
[at tachment "Pricing of gem 7. xls" deleted by Ilinca R Bogza/Nevi{ork/DBNA/DeuBa 1
CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER
-, I
DBSI_00711490
Jason Lowry
FW. Gernstone CDO 7 - portfolio nark
Need line Item marks for cdo portfolio use dec or jan depending on which is better
From: Abhayad Kamat Sent: Wednesday, February 07, 2007 12:51 PM To: Kevin Jenks; Marco Lukesch; Rachel Wish Cc: flinca R Bogza; Chehao Lu Subject: Gemstone CDO 7 - portfolio mark
Kevin, what is the overall gain/loss (based on current marks) on the Gemstone CDO 7 portfolio?
Abhayad Kamat Global CDO Group Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917)in cell (732) 578-2890 fax
This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden.
Confidential Treatment Requested
I _ Redatd by the Permanent
S =be ,littm on Invesigation
GEM7 -00003084
Jason Lowry
FW: Gemstone COO 7 • portfolio mark
Need line Item marks for cdo portfolio use dec or jan depending on which is better
From: Abhayad Kamat Sent: Wednesday, February 07, 2007 12:51 PM To: Kevin Jenks; Marco Lukesch; Rachel Wish Cc: Ilinca R Bogza; Chehao Lu Subject: Gemstone COO 7 - portfolio mark
Kevin, what is the overall gainlloss (based on current marks) on the Gemstone COO 7 portfolio?
Abhayad Kamat Global COO Group
..
Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917) cell
_. Redacted by tfle Pennanent SubcOm.ittee on Investigations
(732) 578-2890 fax
This e-mail may contain confidential and/or privileged information. If you .are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or. distribution of the material in this e-mail is strictly forbidden.
Confidential Treatment Requested
GEM7 -00003084
Subject: FW. Updated prices
Attachments: prices sent to kevin 20070306.xis
This is our estimate of our portfolio marks currently. This is not 3rd party as we have not gotten all for February. We are approx down 30mm
From: Paul Mazzill Sent: Tuesday, March 06, 2007 6:20 PM To: Kevin Jenks Cc: Jason Lowry Subject: Updated prices
Confidential Treatment GEIV17-00001958
Abhayad Kamat; 'liinea R Bogza'([email protected]]
FW: Updated prices
prices sent to kevin 20070306.xls
This is our estimate of our portfolio marks currently. This is not 3rd party as we have not gotten all for February. We are approx down 30mm
From: Paul MazzliU Sent: Tuesday, March 06, 20076:20 PM To: Kevin Jenks Cc: Ja son lowry Subject: Updated prices
Wall Street & The Financial Crisis Report Footnote #1475
Confid entia I Treatment Req uestc;t=I--..... iiIiiiiiI ... iiiiIii .............. GEM7 -00001958
Greg To"Richard Dalbert" Lippmann/NewYorlcDBNA/DeuBa@DBAMERICAS <richard.dalbertidb.com>
business
From: Rajeev Misra
Subject: Re: Fremont Shut Down Sub-prime business
Well, no regrets. Let's hold tight on our shorts now. It will be a bumpy mkt to mkt
ride but we will prevail. _________________
Sent from my BlackBerry Handheld.
From: Greg Lippmann
Well, we covered some a bit too early.
NEW to CCC Watch Neg at S&P from B- Watch Neg
*NEW CENTURY SAYS U.S. ATTORNEY CONDUCTING CRIMINAL PROBE
*NEW CENTURY SAYS U.S. ATTY PROBE ON TRADING, ACCOUNTING ERRORS
*NEW CENTURY SAYS NYSE REVIEWING TRANSACTIONS IN ITS SECURITIES
*NEW CENTURY SAYS SEC REQUESTED MEETING ON RESTATEMENT
*NEW CENTURY SEEKING TO OBTAIN WAIVERS FROM LENDERS
*NEW CENTURY SEES REPORTING PRETAX LOSS FOR 4Q, YEAR
*NEW CENTURY SEES CONCLUDING MATERIAL WEAKNESSES WERE PRESENT _________________
From: Ryan Stark
Cc: Philip Weingord; Frank Byrne; Anilesh Ahuja; Michael Commaroto; Andrew Peisch;
Glenn Minkoff
Ryan Stark
Deutsche Bank Securities
60 Wall St. Rd by The PerMeent NY, NY 10005 Subomfittee Of 1InwutgtiOns 212-250-8473
917- _ cell
Wall Street & The Financial Crisis Report Footnote #1476 D
. * . . . . . s TETEAT n~~~~~~~~~~~~~~~r<DT DOT tT~afll T Confidential Treatment Reciuested by L)UU1 IJDOrlD~l^l~ , -D sOJ
InlalqAso
business
Call me if you want.
sent from my BlackBerry Handheld.
From: Rajeev Misra Sent: 03/03/2007 05:34 AM To: Greg Lippmann Cc: Richard DAlbert; Anshu Jain Subject: Re: Fremont Shut Down Sub-prime business
Well, no regrets. Let's hold tight on our shorts now. It will be a bumpy mkt to mkt ride but we will prevail.
From: Greg Lippmann Sent: 03/02/2007 06:44 PM To: Rajeev Misra Cc: Richard DAlbert Subject: Fw: Fremont Shut Down sub-prime business
Well, we covered some a bit too early.
NEW to CCC Watch Neg at S&P from B- Watch Neg *NEW CENTURY SAYS U.S. ATTORNEY CONDUCTING CRIMINAL PROBE *NEW CENTURY SAYS U.S. ATTY PROBE ON TRADING, ACCOUNTING ERRORS *NEW CENTURY SAYS NYSE REVIEWING TRANSACTIONS IN ITS SECURITIES *NEW CENTURY SAYS SEC REQUESTED MEETING ON RESTATEMENT *NEW CENTURY SEEKING TO OBTAIN WAIVERS FROM LENDERS *NEW CENTURY SEES REPORTING PRETAX LOSS FOR 4Q, YEAR *NEW CENTURY SEES CONCLUDING MATERIAL WEAKNESSES WERE PRESENT
From: Ryan Stark Sent: 03/02/2007 05:53 PM To: Greg Lippmann; Hiroki Kurita; Jordan Milman Cc: Philip Weingord; Frank Byrne; Anilesh Ahuja; Michael Commaroto; Andrew Peisch;
Glenn Minkoff Subject: Fremont Shut Down Sub-prime business
This is real - not a rumor.
Ryan Stark Director Deutsche Bank Securities 60 Wall st. NY, NY 10005 212-250-8473 917 •••• cell
Confidential Treatment Requested bv DBSI
_ - Redaded by the ' ....... ent Subcommittee 0tIlnvestig8tion~
DBSI PSI EMAIL02392659
Fremont General Corporation (the "Company") could not file its Annual Report on
Form 10-K for the fiscal year ended December 31, 2006 by March 1, 2007 without
unreasonable effort or-expense for the reasons set forth below.
In light of the current operating environment for subprime mortgage lenders and
recent legislative and regulatory events, Fremont Investment & Loan, the
Company's wholly owned industrial bank subsidiary ("FIL"), intends to exit its
subprime residential real estate lending business. Management and the board of
directors are engaged in discussions with various parties regarding the sale of
the business.
Additionally, the Company expects that it, FIL and the Company's wholly owned
subsidiary, Fremont General Credit Corporation ("FGCC"), will enter into a
voluntary formal agreement, to be designated as a cease and desist order (the
"Order"), with the Federal Deposit Insurance Corporation (the "FDIC"). Among
other things, the Order will require FIL to cease and desist from the following:
o Operating with management whose policies and practices are detrimental
to FIL;
procedures in place in relation to FIL's brokered subprime mortgage
lending and commercial real estate construction lending businesses;
o Operating with inadequate underwriting criteria and excessive risk in relation to the kind and quality of assets held by FIL;
o Operating without an accurate, rigorous and properly documented methodology concerning its allowance for loan and lease losses;
o Operating with a large volume of poor quality loans;
o Engaging in unsatisfactory lending practices;
o Operating without an adequate strategic plan in relation to the volatility of FIL's business lines and the kind and quality of assets
held by FIL;
o Operating with inadequate capital in relation to the kind and quality
of assets held by FIL;
o Operating in such a manner as to produce low and unsustainable earnings;
o Operating with inadequate provisions for liquidity in relation to the volatility of FIL's business lines and the kind and quality of assets
held by FIL;
o Marketing and extending adjustable-rate mortgage ("ARM") products to
subprime borrowers in an unsafe and unsound manner that greatly increases the risk that borrowers will default on the loans
2
…=================PAGE BREAK==================
or otherwise cause losses to FIL, including (1) ARM products that qualify borrowers for loans with low initial payments based on an introductory rate that will expire after an initial period, without
adequate analysis of the borrower's ability to repay at the fully
Confidential Treatment Requested by DBSI DBSI-PSI-EMAIL02392660
Fremont General Corporation (the "Company") could not file its Annual Report on Form 10-K for the .fiscal year ended December 31, 2006 by March 1, 2007 without unreasonable effort or expense for the reasons set forth below.
In light of the current operating environment for subprime mortgage lenders and recent legislative and regulatory events, Fremont Investment & Loan, the Company's wholly owned industrial bank subsidiary ("FIL"), intends to exit its subprime residential real estate lending business. Management and the board of directors are engaged in discussions with various parties regarding the sale of the business.
Additionally, the Company expects that it, FIL and the Company's wholly owned subsidiary, Fremont General Credit corporation ("FGCC"), will enter into a voluntary formal agreement, to be designated as a cease and desist order (the "Order"), with the Federal Deposit Insurance Corporation (the "FDIC"). Among other things, the Order will require FIL to cease and desist from the following:
o Operating with management whose policies and practices are detrimental to FIL;
o Operating FIL without effective risk management policies and procedures in place in relation to FIL's brokered subprime mortgage lending and commercial real estate construction lending businesses;
o Operating with inadequate underwriting criteria and excessive risk in relation to the kind and quality of assets held by FIL;
o Operating without an accurate, rigorous and properly documented methodology concerning its allowance for loan and lease losses;
o Operating with a large volume of poor quality loans;
o Engaging in unsatisfactory lending practices;
o Operating without an adequate strategic plan in relation to the volatility of FIL's business lines and the kind and quality of assets held by FIL;
o Operating with inadequate capital in relation to the kind and quality of assets held by FIL;
o Operating in such a manner as to produce low and unsustainable earnings;
o Operating with inadequate provisions for liquidity in relation to the volatility of FIL's business lines and the kind and quality of assets held by FIL;
o Marketing and extending adjustable-rate mortgage ("ARM") products to subprime borrowers in an unsafe and unsound manner that greatly increases the risk that borrowers will default on the loans
2
==================================PAGE BREAK====================================
or otherwise cause losses to FIL, including (1) ARM products that qualify borrowers for loans with low initial payments based on an introductory rate that will expire after an initial period, without adequate analysis of the borrower's ability to repay at the fully
Confidential Treatment Requested by DBSI DBSI ]SI _ EMAIL02392660
indexed rate, (2) ARM products containing features likely to require frequent refinancing to maintain affordable monthly payment or to avoid foreclosure, and (3) loans or loan arrangements with loan-to-value ratios approaching or exceeding 100 percent of the value of the collateral;
o Making mortgage loans without adequately considering the borrower's ability to repay the mortgage according to its terms;
o operating in violation of Section 23B of the Federal Reserve Act, in that FIL engaged in transactions with its affiliates on terms and under circumstances that in good faith would not be offered to, or would not apply to, nonaffiliated companies; and
o operating inconsistently with the FDIC's Interagency Advisory on Mortgage Banking and Interagency Expanded Guidance for Subprime Lending Programs.
The Order will also require FIL to take a number of steps, including (1) having and retaining qualified management; (2) limiting the Company's and FGCC's representation on FIL's board of directors and requiring that independent directors comprise a majority of FIL's board of directors; (3) revising and implementing written lending policies to provide effective guidance and control over FIL's residential lending function; (4) revising and implementing policies governing communications with consumers to ensure that borrowers are provided with sufficient information; (5) implementing control systems to monitor whether FIL's actual practices are consistent with its policies and procedures; (6) implementing a third-party mortgage broker monitoring program and plan; (7) developing a five-year strategic plan, including policies and procedures for diversifying FIL's loan portfolio; (8) implementing a policy covering FIL's capital analysis on subprime residential loans; (9) performing quarterly valuations and cash flow analyses on FIL's residual interests and mortgage servicing rights from its residential lending operation, and obtaining annual independent valuations of such interests and rights; (10) limiting extensions of credit to certain commercial real estate borrowers; (11) implementing a written lending and collection policy to provide effective guidance and control over FIL's commercial real estate lending function, including a planned material reduction in the volume of funded and unfunded nonrecourse lending and loans for condominium conversion and construction as a percentage of Tier I capital; (12) submitting a capital plan that will include a Tier I capital ratio of not less than 14% of FIL's total assets; (13) implementing a written profit plan; (14) limiting the payment of cash dividends by FIL without the prior written consent of the FDIC and the Commissioner of the California Department of Financial Institutions; (15) implementing a written liquidity and funds management policy to provide effective guidance and control over FIL's liquidity position and needs; (16) prohibiting the receipt, renewal or rollover of brokered deposit accounts without obtaining a Brokered Deposit Waiver approved by the FDIC; (17) reducing adversely classified assets; and (18) implementing a comprehensive plan for the methodology for determining the adequacy of the allowance for loan and lease losses.
In addition, the Company is analyzing, in connection with the preparation of the Company's consolidated financial statements as of and for the period ended December 31, 2006, the FDIC's criticism with respect to the Company's methodology for determining the carrying value of the Company's residential real estate loans held for sale.
indexed rate, (2) ARM products containing features likely to require frequent refinancing to maintain affordable monthly payment or to avoid foreclosure, and (3) loans or loan arrangements with loan-to-value ratios approaching or exceeding 100 percent of the value of the collateral;
o Making mortgage loans without adequately considering the borrower's ability to repay the mortgage according to its terms;
o operating in violation of section 23B of the Federal Reserve Act, in that FIL engaged in transactions with its affiliates on terms and under circumstances that in good faith would not be offered to, or would not apply to, nonaffiliated companies; and
o operating inconsistently with the FDIC's Interagency Advisory on Mortgage Banking and Interagency Expanded Guidance for Subprime Lending Programs.
The Order will also require FIL to take a number of steps, including (1) having and retaining qualified management; (2) limiting the Company's and FGCC's representation on FIL's board of directors and requiring that independent directors comprise a majority of FILis board of directors; (3) revising and implementing written lending policies to provide effective guidance and control over FIL's residential lending function; (4) revising and implementing policies governing communications with consumers to ensure that borrowers are provided with sufficient information; (5) implementing control systems to monitor whether FIL's actual practices are consistent with its policies and procedures; (6) implementing a third-party mortgage broker monitoring program and plan; (7) developing a five-year strategic plan, including policies and procedures for diversifying FIL's loan portfolio; (8) implementing a policy.covering FIL's capital analysis on subprime residential loans; (9) performing quarterly valuations and cash flow analyses on FIL's residual interests and mortgage servicing rights from its residential lending operation, and obtaining annual independent valuations of such interests and rights; (10) limiting extensions of credit to certain commercial ~eal estate borrowers; (11) implementing a written lending and collection policy to provide effective guidance and control over FIL's commercial real estate lending function, including a planned material reduction in the volume of funded and unfunded nonrecourse lending and loans. for condominium conversion and construction as a percentage of Tier I capital; (12)· submitting a capital plan that will include a Tier I capital ratio of not less than 14% of FIL's total assets; (13) implementing a written profit plan; (14) limiting the payment of cash dividends by FIL without the prior written consent of the FDIC and the Commissioner of the California Department of Financial Institutions; (15) implementing a written liquidity and funds management policy to provide effective guidance and control over FIL's liquidity position and needs; (16) prohibiting the receipt, renewal or rollover of brokered deposit accounts without obtaining a Brokered Deposit Waiver approved by the FDIC; (17) reducing adversely classified assets; and (18) implementing a comprehensive plan for the methodology for determining the adequacy of the allowance for loan and lease losses.
In addition, the Company is analyzing, in connection with the preparation of the Company's consolidated financial statements as of and for the period ended December 31, 2006, the FDIC's criticism with respect to the Company's methodology for determining the carrying value of the Company's residential real estate loans held for sale.
Confidential Treatment Requested by DBSI DBSI PSI EMAIL02392661
Michael Lamont/NewYork/DBNA/DeuBa@DBAMERICAS
lets discuss this when you have a chance. long story
----- Forwarded by Michael Lamont/NewYork/DBNA/DeuBa on 03/15/2007 08:33 AM -----
Anshu Jain/DMGGM/DMG UK/DeuBa@DBEMEA
03/14/2007 06:36 PM
lets discuss this when you have a chance. long story
ee bee
Anshu Jain/DMGGM/DMG UK/DeuBa@DBEMEA
03/14/2007 06:36 PM
DBSI ]SI_ EMAIL0206481 0
Conf!dential Treatment Requested by DBSI DBSI _PSI _ EMAlL020648 1 1
Well done..
From: Fred Brettschneider Sent: 03/14/2007 06:25 PM EDT To: Anshu Jain; Rajeev Misra; Yassine Bouhara; Pablo Calderini; Barry Bausano; Jonathan
Hitchon Cc: Michael Lamont; Richard DAlbert Subject: HBK-pls read
We believe that we have reached an acceptable compromise with HBK. We will be restructuring the
unsold mezz Aaa and we will underwrite the senior portion leaving them with the junior piece. We
are still hopeful of selling the entire tranche but this "re-tranching" vastly mitigates our
risk. HBK seems pleased with the outcome and was appreciative of our efforts.
Freddie
Confidential Treatment Requested by DBSI DBSI-PSI-EMAEL02064812
Well done ..
From: Fred Brettschneider Sent: 03/14/2007 06:25 PM EDT To: Anshu Jain; Rajeev Misra; Yassine Bouhara; Pablo Ca.lderini; Barry Bausano; Jonathan
Hitchon Cc: Michael Lamont; Richard DAlbert Subject: HBK-pls read
We believe that we have reached an acceptable compromise with HBK. We will be restructuring the unsold mezz Aaa and we will underwrite the senior portion leaving them with the junior piece. We are still hopeful of selling the entire tranche but this "re-tranching" vastly.mitigates our risk. HBK seems pleased with the outcome and was appreciative of our efforts.
Freddie
Confidential Treatment Requested by DBSI DBSI _PSI _ EMAIL02064812
Larry Pike1NewYork/DBNAIDeuBa(¢DBAMERICAS
03/27/2007 10:34 AM
Discussion points:
** On Feb 21 HBK priced GEMSTONE 7 in a weak market for CDOs
** Only about half the deal cleared up and down the capital structure with HBK taking
down the balance as agreed in advance.
** Earlier during the structuring phase, we had advised them against adding a 2-year
revolving (reinvestment) period rather than leaving it a static deal as in past deals
but they insisted on this new feature. This process pushed the deal marketing back 2 to
3 weeks into a worse time for CDOs and added a feature not favored by investors.
** 400mm of the unsold bonds were a middle (mezz) AAA class that were expected to be
purchased by an investor who backed out at a late stage due to a deteriorating market.
** HBK was upset about this and wanted DB to take these bonds down, threatening to
curtail business globally with HBK if we didn't.
** In the end we agreed to carve this 400mm into a senior and junior piece and DB took
down the senior 200mm, with HBK keeping the junior 200mm.
Bill- side note that they did increase the deal size from 750mm to l.lbb but we did not
have any problem with that or advise against it.
If you think I have still left out some info that clarifies anything, please let me know.
Larry Pike, CFA Director Deutsche Bank Securities, Inc.
225 Franklin St., 24th Floor
Boston, MA 02110 (617) 217-6422
Gemstone 7
DB holds 200mm Class A-lbl
HBK owns 200mm A-lb II 31.9mm Class B 38.3mm Class C
36.1mm Class D
(a little over half of this class)
(about 2/3 of this class)
They take down the BBs and equity in their deal
Below is the capital structure. The A-lb was expected to be sold but the account backed
out and is NOT considered to be still actively looking at it. The class is being split
further with DB keeping the senior 200mm of risk in that class and HBK keeping the
junior 200mm of risk.
RATING(M/S) Aaa/AAA Aaa/AAA Aaa/AAA
SIZE (%) 22.2 36.3 14.4
COUPON NA
CONFIDENTIAL - PRODUCED TO M&T PURS Report Footnote #1479
PRICE NA
DM MA
ToSean 'Wb.elanldb/dbcom@DBAmericas. michaeLjones(Wfo·com
SubjectAs sent to Bill Healy on HBK
Discussion p·oints: ** On Feb ·21 HBK priced GEMSTONE 7 in a weak market for CDOs ** Only about half the deal cleared up and· down the capital structure with HBK taking down the balance as agreed in advance. ** Earlier during the structuring phase, we had advised them against adding a 2-year revolving (reinvestment) period rather than leaving it a static deal as in past deals but they insisted on this new feature. This process pushed the deal marketing back 2 to 3 weeks into a worse time for CDOs and added a feature not favored by investors. ** 400mm of the unsold bonds were a middle (mezz) AAA class that were expected to be purchased by an investor who backed out at a late stage due to a deteriorating market. ** HBK was upset about this and wanted DB to take these bonds down, threatening to curtail business globally with HBK if we didn't. ** In the end we agreed to carve this 400mm into a senior and junior piece and DB took down the senior 200mm, with HBK keeping the junior 200mm.
Bill- side note that they did increase the deai size from 750mm to l.lbb but we did not have any problem with that or advise against it. If you think I have still left out some info that clarifies anything, please let me know.
Larry Pike, CFA Director Deutsche Bank securities, Inc. 225 Franklin St., 24th Floor Boston, MA 02110 (617) 217-6422
Gemstone 7
DB holds 200mm Class A-1bl
HBK owns 200mm A-1b II 31. 9IT1lIl Class 3B.3mm Class 36.1mm Class
B C D
(about a third of this class) (a little over half of this class) (about 2/3 of this class)
They take down the BBs and equity in their deal
Below is the capital structure. The A-1b was expected to be sold but the account backed out and is NOT considered to be still actively looking at it. The class is being split further with DB keeping the senior 200mm of risk in that class and HBK keeping the junior 200mm of risk.
CLASS A-1a A-lb A-2
SIZE (MM)
SIZE(%) WAL(YR) 22.2 2.1
100%
NA NA
CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER DBSI 0085961:
DBPSI_00859612
Aa2/AA A2/A
Baa2/BBB Bal/BB+
8.8 6.2 5.0 1.7 5.4
* 5.8 6.2 5.7 6.3
NA -
Footnote Exhibits - Page 2202B Aa2/AA 96.9 8.8 5.8 L+ 0.68% 100% L+ 0.68% C A2/A 68.3 6.2 6.2 L+ 2.25% 97.02640% L+ 2.85% D Baa2/BBB 55.1 5.0 5.7 L+ 4.75% 98.91859% L+ 5.00% E Ba1/BB+ 1B.7 1.7 6.3 NA NA NA SUB 59.5 5.4
CONFIDENTIAL - PRODUCED TO M&T PURSUANT TO PROTECTIVE ORDER DBSI _0085961:
DB PSI_00859612
Greg Lippmann/NewYork/DBNA/DeuBa@DBAMERICAS
SubjectRe: Gemstone CDO 7 - HBK - repos
we dont have much choice....either we repo for them or we take it down...so we will need
to mark it etc...
3rd Floor
Phone (212) 250-7730
Fax (212) 797-2201
Rich
Rizzo/NewYork/DBNA/DeuBa
Confidential Treatment Requested by DBSI
-
ToRich . RizzolNew YorkIDBNAlDeuBa@l))E
02/201200705:36 PM bee SUbjectRe: Gemstone CDO 7 - HBK - repos
we dont have much choice .... either we repo for them or we take it down ... 50 we will need to mark it etc ...
Greg H. Lippmann Managing Director Deutsche Bank Securities Inc. 3rd Floor 60 Wall street New York, New York 10005 Phone (212) 250-7730 Fax (212) 797-2201 Mobile (917) ...... 1I1t [email protected]
Rich Rizzo/NewYork/DBNA/DeuBa
02/20/2007 09:32
- - Redacted by tbe Permanent Subcommittee on hwutigations
DBSI _PSI _ EMAIL023 7730:
Footnote Exhibits - Page 2204 PM
To
Re: Gemstone CDO 7 - HBK -
repos
Footnote Exhibits - Page 2205 Re: Gemstone CDO 7 - HBK -
repos
Confidential Treatment Requested by DBSI DBSI]SI_EMAll.,02377305
Your call here My concern is mostly about monitoring - seems like this requires the pool to be priced
and hbk generally views market as tighter than it is
Also recall ilinca I think took 10-20MM of gemst 4 and 5 BBs back from jenks - they've
_________________
From: Greg Lippmann Sent: 02/20/2007 04:06 PM To: Abhayad Kamat Cc: Rich Rizzo Subject: Re: Gemstone CDO 7 - HBK - repos
i dont understand these... seems backward.... i would say 20% haircut on A and 30 on BBB
at the moment... .seems you are 15 and 25....
Your.call here My concern is mostly about monitoring- seems like this requires the pool to be priced and hbk generally views market as tighter than it is
Also recall ilinca I think took 10-20MM of gemst 4 and 5 BBs back from jenks - they've been trying to sell and got a 25bid (from deveaney)
From: Greg Lippmann Sent: 02/20/2007 04:06PM To: Abhayad Kamat Cc: Rich Rizzo Subject: Re: Gemstone CDO 7 - HBK - repos
i dont understand these ... seems backward .... i would say 20% haircut on A and 30 on BBB at the moment .... seems you are 15 and 25 ... .
02/20/2007 09:02
PM
To
Greg
Rich
t
DBSI-PSI-EMAIL02377307
Subj ect
Confidential Treatment Requested by DBS1 DBS1 ]S1_ EMAIL023 77308
Greg,
HBK's Gemstone CDO 7 is pricing tomorrow and we will probably have 40-50% of the As and BBBs unsold -- about $35m As and $30m BBBs. HBK will take these tranches back but we would like to offer them repos on these tranches if possible.
Would you be ok to offer repos at the following advance rates: Rating Advance Rate % A2/A 85% Baa2/BBB 75%
Rating Advance Rate % (based on par) Advance Rate % (based on pool market value) A2/A 12.0% 6.5% Baa2/BBB 7.0% 1.5% - CDO purchased pool at price of -96.5% (27% BB assets); based on current market, pool is down 2.0% since purchase.
Once you confirm if ok on the advance rates, I will check with Alain Van-Loo for interest rates to be charged.
thanks. Abhayad
Greg,
HBK's Gemstone CDO 7 is pricing tomorrow and we will probably have 40-50% of the As and BBBs unsold -- about $35m As and $30m BBBs. HBK will take these tranches back but we would like to offer them repos on these tranches if possible.
Would you be ok to offer repos at the following advance rates: Rating Advance Rate % A2/A 85% Baa2/BBB 75%
Rating value) A2/A
Advance Rate % (based on par) Advance Rate % (based on pool market
12.0% Baa2/BBB 7.0% - CDO purchased pool at price is down 2.0% since purchase.
6 .. 5% 1. 5%
of -96.5% (27% BB assets); based on current market, pool
Once you confirm if ok on the advance rates, I will check with Alain Van-Loo for interest rates to be charged.
thanks. Abhayad
Confidential Treatment Requested by DBSI DBSI]SI_EMAIL02377309
Deutsche Bank Securities Inc. 60 Wall Street, 19th Floor, New York, NY 10005-2858 (212) 250-0526 work (917) ^ | cell
(732) 578-2890 fax
"ILINCA BOGZA, DEUTSCHE BANK SECURI" <[email protected]>
Sent by: [email protected]
40000 = Redected by the Permanent 0----
WOWMEbtee on investiption, I .--- j
DBSI-PSI-EMAEL023773 10
Deutsche Bank securities Inc. 60 Wall street, 19th Floor, New york, NY 10005-2858 (212) 250-0526 work (917) 32 cell (732) 578-2890 fax
Forwarded by Abhayad Kamat/NewYork/DBNA/DeuBa on 02/20/2007 03:44 PM -----
"ILINCA BOGZA, DEUTSCHE BANK SECURI"
<[email protected]>
undisclosed-
REVISED TALK **
**
Confidential Treatment Requested by DBSI DBSI ]SI _ EMAIL023 77311
** UPDATE GEMSTONE CDO 7, A $[1.1]BLN MEZZANINE ABS CDO MANAGED BY HBK
** EXPECTED PRICING FEB [21ST].
L+ [2.65% AREA]
L+ [5.00% AREA]
* CALL DESK *
This has been prepared solely for informational purposes. It is not an offer,
recommendation or solicitation to buy or sell, nor is it an official confirmation of
terms. It is based on information generally available to the public from sources
believed to be reliable. No representation is made that it is accurate or complete or
that any returns indicated will be achieved. Changes to assumptions may have a material
impact on any returns detailed. Past performance is not indicative of future returns.
Price and availability are subject to change without notice. Additional information is
available upon request.
CLASS
A-1
A-2
B
** UPDATE GEMSTONE CDO 7, A S[l.l]BLN MEZZANINE ABS CDO MANAGED BY HBK
** EXPECTED PRICING FEB [21ST] .
CLASS RATING(M/S) SIZE(MM) SIZE(%) WAL (YR) PRICE TALK 101
A-l Aaa/Jl.AA [716.0) [65.0] [3.2] * CALL DESK * A-2 Aaa/Jl.AA [B7.0] [7.9) [5.3] * NOT OFFERED * B Aa2/AA [96.9] [B. B] [6.0) L+ [0.62% AREA] 90% C A2/A [6B.3] [6.2] [6.3) L+ [2.65% AREA] 75% D Baa2/BBB [55.1) [5.0] [5.7] L+ [5.00% AREA] 75% E Bal/BB+ [lB.7) [1. 7] [6.3] * CALL DESK * SUB [59.5) [5.4)
This has been prepared solely for informational purposes. It is not an.offer, recommendation or solicitation to buy or sell, nor is it an official confirmation of terms. It is based on information generally available to the public from sources believed to be reliable. No representation is made that it is accurate or complete or that any returns indicated will be achieved. Changes to assumptions may have a material impact on any returns detailed. Past performance is not indicative of future returns. Price and availability are subject to change without notice. Additional information is available upon request.
:onfidential Treatment Requested by DESI DESI ]SI _ EMAIL02377312
Raftp Serces
STANDARD &POOR'S
55 Water Street, 4 ist. Roor New York N 1Y041-Oo 212 438 2000 Tel 212 438 2650 Fax
March 15, 2007
Gemstone CDO VII Ltd. c/o Deutsche Bank (Cayman) Limited P.O. Box 1984 GT Elizabethan Square, Grand Cayman Cayman Islands Attention: The Directors
Re: Gemstone CDO VII Ltd./Gemstone CDO VII Corp. U.S.$244,000,000 Class A-la Floating Rate Notes Due December 2045 U.S.$400,000,000 Class A-lb Floating Rate Notes Due December 2045 U.S.$159,000,000 Class A-2 Floating Rate Notes Due December 2045 U.S.$96,900,000 Class B Floating Rate Notes Due December 2045 U.S.$68,300,000 Class C Floating Rate Deferrable Interest Notes Due December 2045 U.S.$55,100,000 Class D Floating Rate Deferrable Interest Notes Due December 2045 U.S.$18,700,000 Class E Floating Rate Deferrable Interest Notes Due December 2045
Dear Sir or Madam:
Pursuant to your request for a Standard & Poor's rating on the above-referenced obligations, we have reviewed the information submitted to us and, subject to the enclosed Terms and Conditions, have assigned ratings to the classes as follows:
Amount U.S.$244,000,000 U.S.$400,000,000 U.S.$159,000,000 U.S.$96,900,000 U.S.$68,300,000 U.S.$55,100,000 U.S.$18,700,000
Maturit1 December 12,2045 December 12, 2045 December 12, 2045 December 12, 2045 December 12, 2045 December 12, 2045 December 12, 2045
The rating is not investment, financial, or other advice and you should not and cannot rely upon the rating as such. The rating is based on information supplied to us by you or by your agents but does not represent an audit We undertake no duty of due diligence or independent verification of any information. The assigmnent of a rating does not create a fiduciary relationship between us and you or between us and other recipients of the rating. We have not consented to and will not consent to being named an "expert" under the applicable securities
www.standardandpoors.com
Confidential Treatment Reques Wall Street & The Financial Crisis Report Footnote #1484
,,j
RatinA AAA AAA AAA AA ' A
BBB BB+
E - - E- ; .
STANDARD &POOR'S
Gemstone CDO vn Ltd. c/o Deutsche Bank (Cayman) Limited P.O. Box 1984GT Elizabethan Square, Grand Cayman Cayman Islands , Attention: The Directors
March 15,2007
Re: Gemstone CDO VII LtcL/Gemstone CDO VII Corp.
55 water Street, 41St. Roor NewYorit, NY 10041-(00) 212 438 2000 Tel 212 438 2650 Fax
U.S.S244,OOO,OOO Class A-Ia Floating Rate Notes Due December 2045 U.S.$400,OOO,000 Class A-Ib Floating Rate Notes Due December 2045 U.S.$159,OOO,000 Class A-2 Floating Rate Notes Due December 2045 U.S.S96,900,OOO Class B Floating Rate Notes Due December 2045 U.S.$68,300,000 Class C Floating Rate Deferrable Interest Notes Due December 2045 U.S.S55,IOO,000 Class 0 Floating Rate Deferrable Interest Notes Due December 2045 U.S.SI8,700,OOO Class E Floating Rate Deferrable Interest Notes Due December 2045
Dear Sir or Madam:
Pursuant to your request for a Standard & Poor's rating on the above-referenced obligations, we have reviewed the infonnation submitted to us and, subject to the enclosed Terms and Conditions. have assigned ratings to the classes as follows:
Class Amount Maturity Rating A-la U.S.$244,000,OOO December 12, 2045 AAA A-lb U.S.$400,000,000 December 12,2045 AAA A-2 U.S.$159,000,000 December 12, 2045 AAA B U .S.$96,900,000 December 12, 2045 AA C U.S.$68,300,OOO December 12, 2045 A D U.S.$55,100,000 December 12, 2045 BBB E U.S.$18,700,00O December 12,2045 BB+
The rating is not investment, financial, or other advice and you should not and cannot rely upon the rating as such. The rating is based on information supplied to us by you or by your agents but does not represent an audit We undertake no duty of due diligence or independent verification of any infonnation. The assignment of a rating does not create a fiduciary relationship between us and you or between us and other recipients of the rating. We have not consented to and will not consent to being named an "expert" under the applicable securities
www.standardandpoors.com
Confidential Treatment Reques Wall Street & The Financial Crisis Report Footnote #1484
GEM7-00001658
laws, including without limitation, Section 7 of the U.S. Securities Act of 1933. The rating is not a "market rating" nor is it a recommendation to buy, hold, or sell the obligations.
This letter constitutes Standard & Poor's permission to you to disseminate the above-assigned rating to interested parties. Standard & Poor's reserves the right to inform its own clients, subscribers, and the public of the rating.
Standard & Poor's relies on the issuer and its counsel, accountants, and other experts for the accuracy and completeness of the information submitted in connection with the rating This rating is based on financial information and documents we received prior to the issuance of this letter. Standard & Poor's assumes that the documents you have provided to us are final. If any subsequent changes were made in the final documents, you must notify us of such changes by sending us the revised final documents with the changes clearly marked.
To maintain the rating, Standard & Poor's must receive all relevant financial information, including all reports submitted to the trustee, as soon as such information is available. Placing us on a distribution list for this information would facilitate the process. You must promptly notify us of all material changes in the financial information and the documents. Standard & Poor's may change, suspend, withdraw, or place on CreditWatch the rating as a result of changes in, or unavailability of, such information. Standard & Poor's reserves the right to request additional information, if necessary, to maintain the rating. Please send all information available via electronic delivery to: SCDO surveillance(psandR.com. In addition, please send hard copies of all information to: Standard & Poor's Ratings Services, 55 Water Street, 42nd floor, New York, New York 10041-0003, Attention: SCDO Surveillance Group.
Standard & Poor's is pleased to have the opportunity to be of service to you. For more information please visit our website at www.standardandpoors.com. If we can be of help in any other way, please contact us. Thank you for choosing Standard & Poor's and we look forward to working with you again.
Very truly yours,
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
v A f a nI
Analytical Contact: William Leong 212-438-1387
Confidential Treatment Requested GEM7-00001659
laws, including without limitation, Section 7 of the U.S. Securities Act of 1933. The rating is not a "market rating" nor is it a recommendation to buy, hold, or sell the obligations.
This letter constitutes Standard & Poor's permission to you to disseminate the above-assigned rating to interested parties. Standard & Poor's reserves the right to inform its own clients, subscribers, and the public of the rating.
Standard & Poor's relies on the issuer and its counsel, accountants, and other experts for the accuracy and completeness of the information submitted in connection with the rating. This rating is based on financial information and documents we received prior to the issuance of this letter. Standard & Poor's assmnes that the documents you have provided to us are final. If any subsequent changes were made in the final documents, you must notify us of such changes by sending us the revised final documents with the changes clearly marked.
To maintain the rating, Standard & Poor's must receive all relevant financial information, including all reports submitted to the trustee, as soon as such information is available. Placing us on a distribution list for this information would facilitate the process. You must promptly notify us of all material changes in the financial information and the documents. Standard & Poor's may change, suspend, withdraw, or place on CreditWatch the rating as a result of changes in, or unavailability of, such information. Standard & Poor's reserves the right to request additional information, if necessary, to maintain the rating. Please send all information available via electronic delivery to: sena [email protected]. In addition, please send hard copies of all information to: Standard & Poor's Ratings Services, 55 Water Street, 42nd floor, New York, New York 10041-0003, Attention: scna Surveillance Group.
Standard & Poor's is pleased to have the opportunity to be of service to you. For more information please visit our website at www.standardandpoors.com. Ifwe can be of help in ariy other way, please contact us. Thank you for choosing Standard & Poor's and we look fOlWard to working with you again.
Very truly yours,
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
"~'~"J'h I I
Applicable To U.S. Structured Finance Ratings
Scone of Rating You understand and agree that (i) an issue rating reflects Standard & Poor's current opinion of the likelihood that payments of principal and interest will be made on a timely basis in accordance with the terms of the obligations, (ii) a rating is an opinion and is not a verifiable statement of fact, (iii) ratings are based on infomtion supplied to Standard & Poor's by an issuer or its agents and upon other information obtained by Standard & Poor's from other sources it considers reliable, (iv) Standard & Poor's does not perform an audit in connection with any rating and a rating does not represent an audit by Standard & Poor's, (v) Standard & Poor's relies on the issuer, its accountant, counsel, and other experts for the accuracy and completeness of the information submitted in connection with the rating and surveillance process, (vi) Standard & Poors undertakes no duty of due diligence or independent verification of any information, (vii) Standard & Poor's does not and cannot guarantee the accuracy, completeness, or timeliness of the information relied on in connection with a rating or the results obtained from the use of such information, (viil) Standard & Poor's may raise, lower, suspend, place on CreditWatch, or withdraw a rating at any time, in Standard & Poor's sole discretion, and (ix) a rating is not a "mardt rating nor a recommendation to buy, hold, or sell any financial obligation
Publication. Standard & Poor's reserves the right to publish, disseminate or license others to publish or disseminate the rating and the rationale for the rating unless you specifically request that the rating be assigned and maintained on a confidential basis. If a confidential rating subsequently becomes public through disclosure by the issuer or a third party other than Standard & Poor's, Standard & Poor's reserves the right to publish it. As a matter of policy, Standard & Poor's publishes ratings for all public issues and 144A issues in the U.S. market Standard & Poor's may release analytical reports describing the transaction and explaining the basis of our rating in our sole discretion, and we acknowledge that these reports are not issued by or on behalf of you or at your request. Standard & Poor's may publish explanations of Standard & Poor's ratings criteria from time to time and nothing in this Agreement shall be construed as limiting Standard & Poor's ability to modify or refine Standard & Poor's criteria at any time as Standard & Poor's deems appropriate.
Information to be Provided by You. You shall meet with Standard & Poor's for an analytic review at any reasonable time Standard & Poor's requests. You also agree to provide Standard & Poor's promptly with al information relevant to the rating and surveillmance of the rating including information on material changes to information previously supplied to Standard & Poor's. The rating may be affected by Starndard & Poor's opinion of the accuracy, completeness, timeliness, and reliability of information received from you or your agents. Standard & Poor's undertakes no duty of due diligence or independent verification of information provided by you or your agents. Standard & Poor's reserves the right to withdraw the rating if you or your agents faMls to provide Standard & Poor's with accurate, complete, timely, or reliable information.
Confidential Information. For purposes of this Agreement, "Confidential Information" shall mean information received by Standard & Poor's from you or your agents which has been marked "Proprietary and Confidential' or in respect of which Standard & Poor's has received specific written notice of its proprietary and confidential nature. Notwithstanding the foregoing, information disclosed by you or your agents shall not be deemed to be Confidential Information, and Standard & Poor's shall have no obligation to treat such information as Confidential Information, if such information (i) was substantially known by Standard & Poor's at the time of such disclosure, (ii) was known to the public at the time of such disclosure, (iii) becomes known to the public (other than by Standard & Poor's act) subsequent to such disclosure, (iv) is disclosed lawfully to Standard & Poor's by a third party subsequent to such disclosure, (v) is developed independently by Standard & Poor's without reference to the Confidential Information, (vi) is approved in writing by you for public disclosure, or (vii) is required by law to be disclosed by you or Standard & Poor's, provided that notice of such required disclosure is given to you. Commencing on the date hereof,
Applicable To U.S. Structured Finance Ratings
Scope of Rating You tmderstand and agree that (i) an issue rating reflects Standard & Poor's current opinion of the likelihood that payments of principal and interest will be made on a timely basis in accordance with the terms of the obligations, (n) a rating is an opinion and is not a verifiable statement of filet, (iiI) ratings arc based on information supplied to Standard & Poor's by an issuer or its agents and upon other information obtained by Standard & Poor's from other sources it considers reliable, (iv) Standard & Poor's docs not perform an IIUdit in connection with any rating and a rating ~ not represent an audit by Standard & Poor's, (v) Standard & Poor's relies on the issuer, its accountant, counsel, and other experts for the accuracy and completeness of the information submitted in connection with the rating and surveillance process, (VI) Standard & Poor's undertakes no duty of due diligence or independent verification of any information, (vii) Standard & Poor's docs not and cannot guarantee the accuracy, completeness, or timeliness of the infonnation relied on in connection with a rating or the results obtained from the use of such information, (viiI) Standard & Poor's may raise, lower, suspend, place on CreditWatch, or withdraw a rating at any time, in Standard & Poor's sole discretion, and (ix) a rating is not a "market" rating nor a recommendation to buy, hold, or sell any financial obligation
Publication. Standard & Poor's reserves the right to publish, disseminate, or license others to publisb or disseminate the rating and the rationale for the rating unless you specifically request that the rating be assigned and maintained on a confidential basis. If a confidential rating subsequently becomes public through disclosure by the issuer or a third party other than Standard & Poor's, Standard & Poor's reserves the right to publish it. As a matter of policy, Standard & Poor's publishes ratings for all public issues and 144A issues in the U.S. market. Standard & Poor's may release analytical reports descn'bing the transaction and explaining the basis of our rating in our sole discretion, and we aclmowlcdge that these reports are not issued by or on behalf of you or at your request Standard & Poor's may publish explanations of Standard & Poor's ratings criteria from time to time and nothing in this Agreement sha11 be construed as limiting Standard 8i Poor's ability to modify or refine Standard & Poor's criteria at any time as Standard & Poor's deems appropriate.
Infonnation to be Proyided bv You. You shall meet with Standard & Poor'S for an analytic review at any reasonable time Standard & Poor's requests. You also agree to provide Standard & Poor's promptly with all information relevant to the rating and surveillance of the rating including information on material changes to information previously supplied to Standard & Poor's. The rating may be affected by Standard & Poor's opinion of the accuracy, completeness, timeliness, and reliability of informiltion received from you or your agents. Standard & Poor's undertakes no duty of due diligence or independent verification of information provided by you or your agents. Standard & Poor's reserves the right to withdraw the rating if you or your agents fails to provide Standard & Poor's with accurate, complete, timely, or reliable information.
Confidential Information For purposes of this Agreement, "Confidential Information" shall mean information received by Standard & Poor's from you or your agents which has been marked ''Proprietary and Confidential" or in respect of which Standard & Poor's has received specific written notice of its proprietary and confidential nature. Notwithstanding the foregoing, information disclosed by you or your agents shall not be deemed to be Confidential Information, and Standard & Poor's shall have no obligation to treat such information as Confidential Information, if such information (i) was substantially known by Standard & Poor's at the time of such disclosure, (n) was known to the public at the time of such disclosure, (iii) becomes known to the public (other than by Standard & Poor's act) subsequent to such disclosure, (iv) is disclosed lawfully to Standard & Poor's by a third party subsequent to such disclosure, (v) is developed independently by Standard & Poor's without reference to the Confidential Information, (vi) is approved in writing by you for public disclosure, or (vb) is required by law to be disclosed by you or Standard & Poor's, provided that notice of such required disclosure is given to you. Commencing on the date hereof,
Standard & Poor's will use Confidential Information only in connection with the assignment and monitoring of ratings and will not directly disclose any Confidential Information to any third party. Standard & Poor's may also use Confidential Infirmation for research and modeling purposes provided that the Confidential Information is not presented in a way that can be directly tied to you. You agree that the Confidenta Information may be used to raise, lower, suspend, withdraw, and place on CreditWatch any rating if the Confidential Information is not directly disclosed
Standard & Poor's Not an Advisor. Fiduciary, or Exteri You understand and agree that Standard & Poor's is not acting as an investment, financial, or other advisor to you and that you should not and cannot rely upon the rating or any other information provided by Standard & Poor's as investment or financial advice. Nothing in this Agreement is intended to or should be construed as creating a fiduciary relationship between Standard & Poor's and you or between Standard & Poor's and recipients of the rating. You understand and agree that Standard & Poor's has not consented to and will not consent to being named an "expert" under the applicable securities laws, including without limitation, Section 7 of the U.S. Securities Act of 1933.
Limitation on Damanges. You agree that Standard & Poor's, its officers, directors, shareholders, and employees shall not be liable to you or any other person for any actions, damages, claims, liabilities, costs, expenses, or losses in any way arising out of or relating to the rating or the related analytic services provided for in an aggregate amount in excess of the aggregate fees paid to Standard & Poor's for the rating, except for Standard & Poor's gross negligence or willful misconduct In no event shall Standard & Poor's, its officers, directors, shareholders, or employees be liable for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, legal fees, or losses (including, without limitation, lost profits and opportunity costs). In furtherance and not in limitation of the foregoing, Standard & Poor's will not be liable in respect of any decisions made by you or any other person as a result of the issuance of the rating or the related analytic services provided by Standard & Poor's hereunder or based on anything that appears to be advice or recommendations. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense, or loss, whether in contract, statute, tort (including, without limitation, negligence), or otherwise. You acknowledge and agree that Standard & Poor's does not waive any protections, privileges, or defenses it may have under law, including but not limited to, the First Amendment of the Constitution of the United States of America.
Term. This Agreement shall terminate when the ratings are withdrawn. Notwithstanding the foregoing, the paragraphs above, "Confidential Information", "Standard & Poor's Not an Advisor, Fiduciary, or Expert", and "Limitation on Damages", shall survive the termination of this Agreement or any withdrawal of a rating.
Third Parties. Nothing in this Agreement, or the rating when issued, is intended or should be construed as creating any rights on behalf of any third parties, including, without limitation, any recipient of the rating. No person is intended as a third party beneficiary to this Agreement or to the rating when issued.
Binding Effect This Agreement shall be binding on, and inure to the benefit of, the parties hereto and their successors and assigns.
Severability In the event that any term or provision of this Agreement shall be held to be invalid, void, or unenforceable, then the remainder of this Agreement shall not be affected, impaired, or invalidated, and each such term and provision shall be valid and enforceable to the fullest extent permitted by law.
Comolete Agreement. This Agreement constitutes the complete agreement between the parties with respect to its subject matter. This Agreement may not be modified except in a writing signed by authorized representatives of both parties.
Governing This Agreement and the rating letter shall be governed by the internal laws of the State of New York. The parties agree that the state and federal courts of New York shall be the exclusive forums for any dispute arising out of this Agreement and the parties hereby consent to the personal jurisdiction of such courts.
Standard & Poor's will use Confidential Information only in connection with the assigmnent and monitoring of ratings and will not directly disclose any Confidential Information to any third party. Standard & Poor's may also use ConfidentiallDfonnation for research and modeling pwposes provided that the ConfidentiallDformation is not presented in a way that can be directly tied to you. Yon agree that the Confidential Information may be used to raise,lower, suspend, withdraw, and place on CreditWatch any rating if the Confidential Information is not directly disclosed.
Standm! & Poor's Not an Advisor. Fiduciary. or Expert. You understand and agree that Standard & Poor's is not actmg as an investment, financial, or other advisor to you and that you should not and cannot rely upon the rating or any other information provided by Standard & Poor's as investment or financial advice. Nothing in this Agreement is intended to or should be construed as creating a fiducimy relationship between Standard & Poor's and you or between Standard & Poor's and recipiems of the rating. You understand and agree that Standard & Poor's has not consented to and will not consent to being named an "expert" under the applicable securities laws, including without limitation, Section 7 of the U.S. Securities Act of 1933.
Limitation on Damages. You agree that Standard & Poor's, its officers, directors, shareholders, and employees shall not be liable to you or any other person for any actions, damages, claims, liabilities, costs, expenses, or losses in any way arising out of or relating to the rating or the related analytic services provided for in an aggregate amount in excess of the aggregate fees paid to Standard & Poor's for the rating, except for Standard & Poor's gross negligence or willful misconduct In no event shall Standard & Poor's, its officers, directors, shareholders, or employees be liable for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, legal fees, or losses (including, without limitation, lost profits and opportunity costs). In furtherance and not in limitation of the foregoing, Standard & Poor's will not be liable in respect of any decisions made by you or any other person as a result of the issuance of the rating or the related analytic services provided by Standard & Poor's hereunder or based on anything that appears to be advice or recommendations. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense, or loss, whether in contract, statute, tort (including, without limitation, negligence), or otherwise. You acknowledge and agree that Standard & Poor's does not waive any protections, privileges, or defenses it may have under law, inclUding but not limited to, the First Amendment of the Constitution of the United States of America.
Im!!. This Agreement shall terminate when the ratings arc withdrawn. Notwithstanding the foregoing, the paragraphs above, ''Confidentiallnfurmation", "Standard & Poor's Not an Advisor, Fiduciary, or Expert", wid "Limitation on Damages", shall survive the termination of this Agreement or any withdrawal of a rating. .
Third Parties. Nothing in this Agreement, or the rating when issued, is intended or should be construed as creating any rights on behalf of any third parties, including, without limitation, any recipient of the rating. No person is intended as a third party beneficiary to this Agreement or to the rating when issued.
Binding Effect This Agreement shall be binding on, and inure to the benefit of, the parties hereto and their successors and assigns.
Severability. In the event that any tenD or provision of this Agreement shall be held to be invalid, void, or unenforceable, then the remainder of this Agreement shall not be affected, impaired, or invalidated, and each such tenD and provision shall be valid and enforceable to the fullest extent permitted by law.
Complete Agreement This Agreement constitutes the complete agreement between the parties with respect to its subject matter. This Agreement may not be modified except in a writing signed by authorized rcprcsentatives of both parties.
Governing Law. This Agreement and the rating letter shall be governed by the intemaIlaws of the State of New York. The parties agree that the state and federal courts ofNcw York shall be the exclusive fonuns for any dispute arising out of this Agreement and the parties hereby consent to the personal jurisdiction of such courts.
March 15, 2007 Moody's Investors Seioe
Gemstone CDO VI[ Ltd. clo Deutsche Bank (Cayman) LHmited 99 Church Street
P.O. Box 1984 GT, Elizabetha Squae New Yorkc New York 10007 George Town, Grand Cayman Caymnan Island
Gemstone CDO VII Corp. c/o Puglisi & Associates B50 Library Avenue Suite 204 Newark, Delaware 19711
Deutsche Bank Trst Company Amnencas 1762 East SL Andrew Place Santa Ana, California 92705
Re: U.S. $244,000,000 Class A-la Floating Rate Notes Due December 2045 (dte "Class A-I a Notes') U.S. $400,000,000 Clams A-lb Floating Rate Notes Due December 2045 (the "Class A-lb Notes") U.S. S159,000,000 Class A.2 Floating Rate Notes Due December2045 (th "Class A-2 Notes") U.S. $96,900,000 Class B Floating Rate Notes Due December 2045 (the "Class B Notes') U.S. S68,300,000 Clas C Floating Rate Deferrable Interest Notes Due December 2045 (t Class C
Notes-) U.S. $55,100,000 Class D Floating Rate Deferrable Interest Notes Due December 2045 (the "Class D
Notes") U.S. 18,700,000 Cass B Floating Rate Defrrable Interst Notes Due Dcembr2045 (the 'Class E
Notes")
Ladies and Gentlenmen
At your request, Moody's Investors Service has rviodee for rating purposes the information submitted to Moodys i; coneCtion with the Issusnce of the above-captioned Notts Capitalized terms used but not defined herein shall have the meanings ascribed to such terms In the Indenture dated as of March 15, 2007 among Gemstone CDO Vll Ltd., as Issuer, Gemstone CDO VII Corp. as Co-lssur and Deutsche Bank Trust Company Am tr:a as Trustee (die "Iudenture").
Based upon the information submitted, Moody's has assigned the following ratings to the Notes: "Aas" to the Class A-1 a Notes, "Aas" to the Class A-lb Notes, "Aaa" to the Clan A-2 Notes, "As2" to the Clans B Note","A2" to the Clan C Notes, "Baa2" tn the Class D Notes and "Bal" to the Clas E Notes.
The rating assigned to the Notes addresses the ultimate cash meipt by the Noteholders of all requfred interest and principal payments as proided by the Notes governing documents. The ratings am based on the expected Lows posed to the Notes relative to the promise of receiving te present value of such payments. The ratings are also based upon dte legal structure of the transaction and the characteristics of the Underlying Assets.
Moody's will publish notice of the ratings and will monitor the ratin nh ratings are subject to reconsideradon at Moody's sole discretion. The ratings are contingent upon recelpt by Moody's, within 30 days of the date of this lener, of all executcd documents in electronic formet (eg. Acrobat PDF).
Stc .oce0 QLy Vc President and Senior Credit Oficr SIr
TOTAL P.02
I
MOODY' 5 INVESTORS P.B2
Moody's Investors Service
clo Deutsehe Bank (Cayman) Limited P.O. Box 1984 OT, EIizabcthanSquare George Town, Grand Cayman Cayman Islands
Gemstone coovn Corp. clo Pu£lisi & Associates 850 Library AvClllle Suite 204 Newark. Delawar

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