HarbourView CDO Class Downgraded

Class C of HarbourView CDO III Ltd. -- which is backed by residential and commercial mortgage-backed securities, among other securities -- has been downgraded from BBB to BBB-minus by Fitch Ratings.Fitch also affirmed the ratings on two other classes of the collateralized debt obligation. The CDO is backed by a portfolio of RMBS, general asset-backed securities, CMBS, and other CDOs. The rating agency attributed the downgrade to a continuing deterioration in the credit quality of the underlying portfolio. "HarbourView III holds a number of securities that Fitch has identified as having the potential to impair the ability of the CDO to pay ultimate interest and principal on the class C notes," Fitch said. "The portfolio has experienced a significant credit deterioration in various sectors, including aircraft, manufactured housing, commercial real estate, small business loans, subprime credit card, and mutual fund fee securitizations." Fitch can be found online at http://www.fitchratings.com.