Enhanced MBS IV CDO Classes Downgraded

Two classes of notes issued by Enhanced Mortgage-Backed Securities IV Ltd. have been downgraded by Derivative Fitch and placed on Rating Watch Negative.The class A-3 subordinated notes were downgraded from BBB-plus to BB, and the class A-4 junior subordinated notes were downgraded from BBB to BB-minus. "The net asset value of the transaction has declined, and assets may need to be sold for the transaction to stay in compliance with overcollateralization tests," Fitch said, citing concerns about the resulting proceeds in light of price volatility. EMBS IV, a collateralized debt obligation, consists of mortgage- and asset-backed securities, collateralized mortgage obligations, U.S. government obligations, corporate securities, cash, and cash equivalents.