CSFB Home Equity Classes Downgraded

Eighteen classes from 10 Credit Suisse First Boston home equity securitizations have been downgraded by Fitch Ratings.In addition, two classes from two other CSFB Home Equity Asset Trust have been placed on Rating Watch Negative. Fitch also affirmed the ratings on 39 classes in 10 CSFB deals. The negative rating actions were attributed to a deterioration in the relationship between monthly losses and excess spread that is generally producing a decline in overcollateralization. "Rapid prepayments and the significant increase in [the London interbank offered rate] have resulted in less subordination and less excess spread than initially anticipated at this point in the transactions' seasoning," Fitch said. The rating agency added that prepayments have resulted in adverse selection, causing the expected loss on the remaining pool balances to be higher than expected.