Three classes of notes in Ballantyne Re PLC have been downgraded by Fitch Ratings because certain reserve funds backing the transaction have "material exposure" to subprime residential asset- and mortgage-backed securities that have experienced significant market declines.The downgrades were as follows: class A-1 floating-rate notes, from AA to A-plus; class B-1 subordinated notes, from BBB-plus to BB-plus; and class B-2 subordinated floating-rate notes, from BBB-plus to BB-plus. The ratings remain on Rating Watch Negative. The rating agency said interest payments to classes B-1 and B-2 were suspended under the terms of the indenture on Sept. 4. "The class A-1 notes were downgraded because Fitch believes the risk profile of the notes is no longer consistent with the AA rating category," Fitch said. "Similarly, classes B-1 and B-2 were downgraded because Fitch does not consider the suspension of interest to be consistent with an investment-grade rating." Ballantyne Re is a special-purpose company incorporated in Ireland.

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