Moody's Downgrades Subprime MBS

Moody's Investors Service has downgraded more than 750 tranches in 77 subprime residential mortgage-backed security transactions from three issuers. Of the downgraded tranches, 162 remain on review for possible further downgrade. The negative rating actions affected the following securities: 315 tranches from 31 subprime RMBS deals issued by ACE Securities Corp. Home Equity Loan Trust; 238 tranches from 22 RMBS deals supported by subprime loans originated by Long Beach; and 218 tranches from 24 subprime RMBS deals issued by Merrill Lynch Mortgage Investors Trust. The downgrades were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien subprime mortgage loans. Moody's can be found on the Web at http://www.moodys.com.