Fitch Downgrades Fairbanks-Serviced Classes

Eleven classes in various structured finance deals have been downgraded by Fitch Ratings following a review of 90 subprime and specialty transactions entirely or partially serviced by Fairbanks Capital Corp.The downgrades were as follows: DLJ 1994-Q7, class B-1, from B to CCC; DLJ 1994-Q8 P1, class IB-1, from BB to B; DLJ 1995-Q10, class B2, from CCC to C; DLJ 1996-Q2, classes B-1 and B-2, from CCC to D; DLJ 1996-Q4, class B-2, from BB-minus to D; IMC 1997-3, class M-2, from BBB-minus to BB; IMC 1997-5, class M-2, from BBB-minus to BB; IMC 1998-1, class B, from BBB-minus to BB; IMC 1998-5, class B, from BBB to BB-minus; and WMC 1997-2, class B, from BB to B. Fitch also affirmed 381 other classes, and 11 were placed or left on Rating Watch Negative. The review stemmed from recent downgrades of Fairbanks' servicer ratings as follows: residential primary servicer for subprime and home equity, from RPS2-minus to RPS3-minus; alternative-A primary servicer, from RPS2-minus to RPS3; and special servicer, from RSS2-minus to RSS3. "If Fitch's opinion were solely based upon the Fairbanks rating actions, many classes would have been downgraded," the rating agency said. "However, in the recent environment the consideration of seasoning, performance, and most notably LIBOR movements were significant mitigants."