People's Choice MBS Classes Downgraded

Seven classes from two People's Choice Home Loan Securities Trust securitizations have been downgraded by Fitch Ratings, and three others have been placed on Rating Watch Negative.The downgrades were as follows: series 2004-1, class M-5, from A-minus to BBB-minus, class M-6, from BBB-plus to BB-plus, class M-7, from BBB to BB, and class M-8, from BBB-minus to BB-minus; and series 2004-2, class M-7, from BBB to BB, class M-8, from BBB-minus to BB-minus, and class B, from BB to B. Classes M-3 and M-4 of series 2004-1 and class M-6 of series 2004-2 were placed on Rating Watch Negative. In addition, Fitch affirmed the ratings on seven other classes in the two transactions. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and loss expectations. The pools consist of conventional 30-year, fixed- and adjustable-rate, first- and second-lien mortgages.