Putnam CDO Classes Downgraded

Classes C-1 and C-2 of Putnam Structured Products CDO 2001-1 Ltd. have been downgraded from BBB to BB-plus by Fitch Ratings.The rating agency also affirmed the ratings on five other classes in the transaction. Fitch said Putnam 2001-1 is a collateralized debt obligation, managed by Putnam Advisory Co., that closed Nov. 30, 2001. The portfolio backing the CDO consists of residential and commercial mortgage-backed securities, real estate investment trusts, consumer and commercial asset-backed securities, and other CDOs. The downgrades stem from increased pressure on excess spread caused by the current interest rate environment, Fitch said. "Consequently, the terms of the interest rate swap, which were negotiated at closing, have created an excessive cash outflow on the transaction," the rating agency said. Fitch can be found online at http://www.fitchratings.com.