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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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From: ldo792/3/2008 9:52:48 PM
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Moody's May Cut A$83 Billion of Mortgage-Backed Bonds
By Laura Cochrane

Feb. 4 (Bloomberg) -- Moody's Investors Service may cut the ratings on about 45 percent of Australia's mortgage-backed bonds because of concerns the U.S. housing slump may make it harder for the insurer of the home loans to pay claims.

Moody's is reviewing A$83 billion ($75 billion) of mortgage- backed bonds because they are linked to loans insured by PMI Mortgage Insurance Ltd., the company said today in a statement. Australia has about A$180 billion of such bonds, of which Moody's rates A$120 billion, said Henry Charpentier, structured finance analyst at Moody's in Sydney.

PMI Mortgage Insurance is the local unit of Walnut Creek, California-based PMI Group Inc., the second-largest U.S. mortgage insurer. PMI may lose its A1 score, the fifth-highest investment grade, Moody's said Jan. 31, citing ``increased loss expectations for U.S. residential mortgages.''

PMI reported its first loss as a publicly traded company in the July-to-September period as it paid more to bail out lenders from bad loans. The company has declined 79 percent over the past year in New York Stock Exchange composite trading.

About 90 percent of the Australian debt under review has the highest investment grade rating of Aaa, Charpentier said in an interview. The debt comprises 325 tranches of debt in 144 mortgage-backed securities, Moody's said in a statement.
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