DOW JONES NEWSWIRES Standard & Poor's Rating Service cut its ratings on U.S. subprime residential mortgage-backed securities, originally worth $9.15 billion, from the years 2005 through 2007 as foreclosures and delinquencies are topping its earlier estimates.
The ratings service said the projected losses for the 157 classes of 21 RMBS deals have made the projected credit support insufficient for the deals to maintain their current ratings. A dozen were slashed from AAA, the highest rating, all the way to below-investment grade, or junk status.
S&P removed 110 of the lowered ratings from watch for further downgrade, while affirming its ratings on 98 classes from 20 of the downgraded deals and removing 28 of the affirmed classes from watch for downgrade. Ratings on six more classes from two transactions remain on watch.
S&P said the underlying weakness of the mortgage pools and their high rate of defaults combined with projections for housing price declines and the overall health of the housing market led to the cuts. S&P said it expects the severity of losses will increase.
These cuts are the latest batch of RMBS to get lowered ratings since S&P recently boosted its loss-projection for subprime RMBS. S&P has resolved ratings on 2,776 classes from 409 U.S. subprime RMBS deals from the 2005, 2006 and 2007 vintages that were on watch for downgrade.
S&P said it has about 508 classes from 107 deals left to review.
-By Lauren Pollock, Dow Jones Newswires; 201-938-5964; lauren.pollock@dowjones.com
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(END) Dow Jones Newswires
December 03, 2008 16:09 ET (21:09 GMT)

Publié le 03 Décembre 2008 Copyright © 2008 Dowjones