DBRS Assigns Provisional Ratings to Xceed Mortgage Trust, Series 2007-T2

DBRS has today assigned provisional ratings to the Series 2007-T2 Notes (the Notes) to be issued by Xceed Mortgage Trust (the Trust), as outlined below.

The finalization of ratings is contingent upon receipt of final documents conforming to information already received.

The ratings of the Notes are based on the following factors:
(1) The relative levels of structural enhancement for each rated class (Class A-1, Class A-2 and Class A-3 have 16% credit enhancement, Class B has 12.5% enhancement, Class C has 8% and Class D has 3.5%);
(2) A diversified pool spread across Canada with all the mortgages originated by Xceed Mortgage Corporation (Xceed) being first mortgages and primarily for single family properties; and
(3) A subordinated lender funds up to 23% loan-to-value (LTV) in excess of the co-ownership interest held by the Trust for certain mortgages with LTV over 90%.

Constraints to the ratings are:
(1) Non-prime quality of borrowers without significant performance history; and
(2) Available excess spread could deteriorate if the actual default, loss and prepayment rates are higher than the assumptions used in enhancement determination.

The collateral supporting the Notes are typically non-prime mortgages which usually experience higher foreclosure frequency and loss severity than prime mortgages. Enhancement levels have been sized to provide for this.

Xceed focuses on providing alternative mortgage financing for the non-traditional market segments in Canada. As of January 31, 2007, Xceed had $2.345 billion mortgages under administration.

Note:
All figures in Canadian dollars unless otherwise noted.