Notice to Noteholders

THIS NOTICE IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

THIS NOTICE CONTAINS IMPORTANT INFORMATION OF INTEREST TO THE BENEFICIAL OWNERS OF THE NOTES.  IF APPLICABLE, ALL DEPOSITARIES, CUSTODIANS AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE REQUESTED TO PASS THIS NOTICE TO SUCH BENEFICIAL OWNERS IN A TIMELY MANNER.

If you are in any doubt as to the action you should take, you are recommended to seek your own financial, legal or other advice immediately from your stockbroker, bank manager, solicitor, accountant or other appropriately authorised independent financial adviser.

If you have recently sold or otherwise transferred your entire holding(s) of the Notes referred to below, you should immediately forward this document to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

SMART SME CLO 2006-1, Ltd.
an exempted limited liability company incorporated under the laws of the Cayman Islands
(the "Issuer")

NOTICE
to the holders of outstanding
€58,000,000 Class E Notes due 2016
(the "Class E Notes")
€84,000,000 Class F Principal Only Notes due 2016
(the "Class F Notes")

This Notice should be read in conjunction with the prospectus dated 19 December 2006 (the "Prospectus") issued in respect of the Class E Notes and the Class F Notes. Terms and expressions used in this notice shall have the same meaning assigned to such terms in the Prospectus.

NOTICE IS HEREBY GIVEN to the holders of outstanding Class E notes and Class F Notes that the Issuer has been informed by the Servicer that Deutsche Bank AG is exploring the potential disposal by way of one or more portfolio sales of a portion of its Spanish non-performing originated assets. The Issuer has been informed by the Servicer that up to 90% of outstanding Reference Obligations may be included in any such disposal. 

If you have any queries in relation to the potential disposal please contact the Servicer.

This notice is given by:

SMART SME CLO 2006-1, Ltd.
as Issuer

This announcement has been issued through the Companies Announcement Service of

the Irish Stock Exchange.