Three classes of notes issued by HarbourView CDO III Ltd., a collateralized debt obligation that includes mortgage-backed securities, have been downgraded and removed from Rating Watch Negative by Fitch Ratings.The downgrades were as follows: class A, from AA-minus to A-minus; class B, from BBB-minus to CCC; and class C, from B-minus to C. The rating agency said the deal has been in a technical default since March, and that a majority of class A noteholders accelerated the maturity of the transaction. "As a result, all principal and interest proceeds available -- less senior transaction fees and expenses, including the hedge counterparty payment -- will be used to pay the class A interest and principal until the notes are paid in full," the rating agency said. Fitch said HarbourView III is composed of 35.0% residential MBS, 29.6% asset-backed securities, 16.4% commercial MBS, 8.6% real estate investment trusts, 7.8% CDOs, and 2.6% corporate debt. The rating agency can be found online at http://www.fitchratings.com.
