Forty-five tranches from 11 U.S. collateralized debt obligations have been downgraded by Derivative Fitch, which cited exposure to trust preferred securities and other debt issued by mortgage lenders, real estate investment trusts, and homebuilders.The issuance amount of the affected tranches totals approximately $1.2 billion. Fitch also affirmed the ratings on $6.8 billion of notes from the same CDOs and two others. The rating agency attributed the downgrades to "rapid deterioration in the credit and liquidity profiles of a number of REITs, homebuilders, and financial institutions underlying these CDOs. In four cases, underlying issuers of trust preferred securities filed for bankruptcy protection." Those four are New Century Financial Corp., American Home Mortgage Investment Corp., Homebanc Corp., and First Magnus Financial Corp. Derivative Fitch Inc., a subsidiary of Fitch Ratings Ltd., can be found on the Web at http://www.derivativefitch.com.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry