Fitch downgrades Fremont

Fitch Ratings said it downgraded Fremont General Corp.'s long-term senior debt to B from B+, individual rating to D from C/D and Fremont General Financing I's preferred securities to CCC+ from B-. The support ratings of both companies were affirmed at 5.

The ratings of Fremont and Fremont Investment & Loan were placed on Rating Watch negative.

The downgrade follows Fremont's announcement that it will postpone the release of its fourth-quarter and full-year 2006 results of operations and that it will not file its 10-K annual report by March 1. While further details have not been released, the agency said it believes that more downside risk will materialize as a result of Fremont's announcement, pressuring the company's financial flexibility, and that recovery prospects for bondholders will likely be lower than previously estimated.

The agency said Freemont faces a difficult subprime residential mortgage market and, financial reporting delays notwithstanding, operating performance may continue to deteriorate over the next 12 to 18 months.

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