Correction: Fitch Affirms & Removes Doral Financial From Rating Watch Negative

Business Wire,  July 30, 2007  

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CHICAGO -- (This is a correction for a press release originally issued on July 20, amending the rating language in the headline and first paragraph to reflect both an affirmation and Rating Watch removal of Doral's ratings, along with the last paragraph, which incorrectly states that Doral is on Rating Watch Positive.)

Fitch Ratings has affirmed and removed all of Doral Financial Corporation's (DRL) ratings from Rating Watch Negative. DRL's Rating Outlook is Positive. Fitch currently rates DRL's long-term Issuer Default Rating (IDR) 'CCC'. The Support Rating Floor for DRL and its principal subsidiary remains unchanged at 'No Floor' (NF). Please see a complete list of affected ratings at the end of this release.

DRL's Positive Rating Outlook is driven by the closing of the equity sale and the payment of a significant impending debt maturity. On July 19, DRL announced that it had received all regulatory approvals and closed the equity sale of a 90% stake to Bear Stearns Merchant Banking for $610 million. In addition, DRL announced today that they have paid the impending $625 million debt maturity.

The equity transaction has removed the immediate liquidity pressure and potential imminent default. However, immediate and long-term concerns still exist, which include demonstrated success of the business model, an ability to return to profitability, rising non-performing assets that could cause credit costs to rise, the currently weakened state of Puerto Rico's economy, and DRL's reduced market position in Puerto Rico. Fitch views that with the recapitalization of the firm complete, DRL can now focus entirely on improving the financial profile of the company.

Resolution of DRL's ratings will be driven by improved operating metrics and satisfactory review of liquidity and capitalization plans.

The following ratings have a Positive Rating Outlook:

Doral Financial Corporation

--Long-term Issuer Default Rating (IDR) 'CCC';

--Senior debt to 'CCC/RR4';

--Preferred stock to 'C/RR6';

--Short-term Issuer Default Rating (IDR) 'C';

--Support '5';

--Support Floor 'NF';

--Individual 'E'.

Doral Bank

--Long-term Issuer Default Rating (IDR) 'B';

--Long-term deposits B+;

--Support '5';

--Support Floor 'NF';

--Individual 'D';

--Short-term Issuer 'B';

--Short-term deposit obligations 'B'.

Fitch's Recovery Ratings (RR) are a relative indicator of creditor recovery prospects on a given obligation within an issuers' capital structure in the event of a default. A broad overview of Fitch's RR methodology as it relates to specific sectors can be found at www.fitchratings.com/recovery.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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