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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: marginnayan who wrote (70635)	10/29/2007 3:00:53 PM
From: marginnayan	Read Replies (1) \| Respond to of 116555

Shares of Fannie Mae fell Monday after credit rating agency Fitch Ratings downgraded three classes of a mortgage-backed securitization issued by the mortgage financier. Shares of Fannie Mae fell $2.32, or 3.9 percent, to $57.21 in afternoon trading. Earlier in the day, Fitch downgraded $9.7 million in Fannie Mae securities. When issuing bonds backed by mortgages, companies often provide an excess spread or reserve of capital to cover potential losses. Actual losses on the downgraded bonds have been exceeding the reserved excess spread, according to Fitch. Of the three classes, one worth $1.9 million was cut four notches to speculative grade "BB" from "BBB+." The two other classes were both downgraded two notches to "AA-" and "A-" respectively. Fitch affirmed one class of the same Fannie Mae securitization worth $9.5 million. That class is rated "AAA."