Two classes of notes issued by Phoenix CDO II Ltd., a collateralized debt obligation that includes mortgage-backed securities, have been downgraded by Fitch Ratings.Classes C-1 and C-2 have been downgraded from CCC to C. Fitch attributed the downgrades to a recent default that it expects to cause the undiscounted principal received by the notes to fall "substantially" below their current balance. The transaction, a CDO managed by Phoenix Investment Partners, is composed of asset-backed securities, residential MBS, and commercial MBS. The rating agency can be found online at http://www.fitchratings.com.
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