Conseco-Linked MH Deals Downgraded

The ratings on nine classes from two manufactured housing transactions linked to Conseco Finance Corp. have been lowered by Standard & Poor's Ratings Services and removed from CreditWatch with negative implications.The downgrades in Manufactured Housing Contract Senior/Sub Pass-Through Certificates, series 2002-1, are as follows: class A, from AAA to A-plus; classes M-1-A and M-1-F, from AA-minus to BBB; class M-2, from A-minus to BB; and class B-1, from BBB to B-plus. The downgrades in Manufactured Housing Contract Senior/Sub Pass-Through Certificates, series 2002-2, are as follows: class A-2, from AAA to A-plus; class M-1, from AA to A-minus; class M-2, from A to BBB-minus; and class B-1, from BBB to BB-minus. S&P attributed the downgrades to the poor performance of the underlying pools of manufactured housing contracts and the resulting decline in credit enhancement. The rating agency said recovery rates on liquidated collateral have "plummeted" for both deals since Conseco has become more reliant on a wholesale liquidation strategy after suspending its MH financing business and filing for bankruptcy in December 2002. S&P can be found online at http://www.standardandpoors.com.