Fitch Downgrades CRE CDO Classes

Two classes of Anthracite 2004-HY1 Ltd., a commercial real estate collateralized debt obligation, have been downgraded by Fitch Ratings and removed from Rating Watch Negative. Class E was downgraded from BBB to BB, and class F was downgraded from BBB-minus to BB. Fitch also affirmed the ratings on four other classes in the deal, which is primarily backed by B-pieces of commercial mortgage-backed securities. The downgrades were based on losses and projected losses to the collateral, Fitch said. The rating agency said it believes investment-grade CMBS "will perform well even in a heightened stress environment," but that the risks facing first-loss and junior-rated bonds in CMBS have risen along with expectations of an increase in commercial real estate defaults.