Industry News

Ratings services downgrade billions in subprime MBS

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Following up on a July 10 warning, Standard & Poor's Ratings Services said Thursday it had downgraded $6.39 billion in mortgage-backed securities backed by subprime loans. The ratings agency said the downgrades involve 562 classes of mortgage-backed securities (MBS), including the majority of the 612 classes placed on "CreditWatch" Tuesday for possible downgrade. Of the 612 securities placed on CreditWatch Tuesday, 498 classes totaling $5.69 billion were downgraded Thursday, while 26 classes were left on CreditWatch. The ratings of 74 classes were affirmed and the securities removed from CreditWatch. Standard & Poor's also announced that it had downgraded 64 of 70 subprime MBS classes placed on CreditWatch before July 10, with a total value of $700.9 million. A complete list of the affected classes was posted on the Standard & Poor's Web site. The $6.39 billion combined value of all 562 downgraded classes represents 1.13 percent of all first-lien subprime mortgage collat...