Moody's downgrades over 1.5 bln usd worth of subprime-backed securities |
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Published
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Thu, 23 Aug 2007 04:49
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MUMBAI (Thomson Financial) - Moody's Investors Service downgraded 120 securities originated in the second half of 2005 and backed by subprime, first-lien mortgage loans.The actions follow a review of the securities rated in the second half of 2005 and affect securities with an original face value of over 1.5 bln usd.The agency said the actions reflect the higher than anticipated delinquency rates of first-lien subprime mortgage loans securitized in the second half of 2005.'These loans were originated in an environment of aggressive underwriting, although not to the same degree as the subprime loans originated in 2006,' it said.Aggressive underwriting combined with the prolonged slowdown in the housing market has caused significant loan performance deterioration and is the primary factor in these rating actions. Moody's has noted a persistent negative trend in severe delinquencies for first-lien subprime mortgage loans securitized in late 2005 and 2006.The vast majority of these downgrades impacted securities originally rated Baa or lower. In total 54 securities originally rated Baa and 60 securities previously rated Ba were downgraded. Additionally, 6 tranches originally rated A were downgraded. No action was taken on securities rated Aaa or Aa.TFN.newsdesk@thomson.comjroCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
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Structured investment vehicles ratings to remain stable - Moody's 