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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Giordano Bruno who wrote (125965)5/29/2008 5:47:49 PM
From: ChanceIsRead Replies (5) of 306849
 
UPDATE: S&P Cuts Ratings On Another $18.46B Of CDOs

>>>A day w/o $10 or $20 billion downgraded is like a day w/o sunshine. (Borrowed from a late '60s Anita Bryant orange juice commercial.)<<<

DOW JONES NEWSWIRES
May 29, 2008 4:19 p.m.


DOW JONES NEWSWIRES


Standard & Poor's cut its ratings on $18.46 billion of U.S. collateralized debt obligations because of credit deterioration and recent ratings cuts on U.S. subprime residential mortgage-backed securities.

Overall, S&P has downgraded $357.17 billion in CDOs, and holds an additional $10.43 billion on watch for near-term downgrades.

The rating agency's latest move affected 132 tranches from 28 U.S. cash flow and hybrid CDOs, with half of them on watch for further downgrades. Eighteen of the CDOs are mezzanine structured-finance CDOs collateralized largely by RMBS and other structured-finance securities. The other 10 are collateralized by A through AAA-rated tranches of RMBS and other structured finance securities. In addition, a $100 million tranch of a synthetic CDO was cut in reaction to a separate downgrade.

So far, S&P has cut its ratings on 3,399 tranches from 803 U.S. cash flow, hybrid and synthetic CDOs as a result of stress in the U.S. residential mortgage market and RMBS deterioration.

CDOs, which use sliced-and-diced assets such as subprime-mortgage bonds to create customized products offering various levels of risk, have been at the heart of steep write-downs at big banks and brokerage firms.
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