Nine classes of subprime asset-backed pass-through certificates issued by Ace Securities Corp. Home Equity Loan Trust have been downgraded by Standard & Poor's Ratings Services. The affected securities were in series 2004-HS1, series 2006-HE3, and series 2006-HE4. S&P also affirmed the ratings on three classes from series 2004-HS1. The downgrades were attributed to "adverse collateral performance that has caused monthly losses to exceed monthly excess interest." S&P added that the amount of loans in the delinquency pipeline "strongly suggests that monthly losses will continue to exceed excess interest, thereby further compromising credit support." The collateral consists primarily of subprime first-lien mortgage loans.
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