Seven certificates issued by Merrill Lynch Mortgage Investors Inc. and Specialty Underwriting and Residential Finance Trust in 2003 and 2004 have been downgraded by Moody's Investors Service.The downgrades were as follows: Merrill Lynch series 2003-BC4, class B-1, from Baa1 to Baa3, class B-2, from Baa2 to Ba2, and class B-3, from Baa3 to Ca; SURF series 2004-BC1, class B-1, from Baa2 to Ba2, and class B-2, from Baa3 to Caa2; and SURF series 2004-BC2, class B-1, from Baa2 to B1, and class B-2, from Baa3 to Ca. Stepping down and "continuous losses" have left the deals with thin credit enhancement levels and made tranches at the bottom of the capital structure more vulnerable to pool deterioration, Moody's said. The transactions are backed by first- and second-lien subprime mortgage loans.

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