S&P Downgrades 109 CDO Tranches

Standard & Poor's Ratings Services has lowered its ratings on 109 tranches (totaling $29.3 billion) from 36 U.S. cash flow and hybrid collateralized debt obligation transactions. S&P said 22 of the affected transactions are mezzanine structured finance CDOs of asset-backed securities, which are collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other structured finance securities. Nine are "high-grade" structured finance CDOs of ABS, which the rating agency defined as those backed at origination primarily by tranches of RMBS and other structured finance assets that are rated from single-A through triple-A. The downgrades reflect various factors, including credit deterioration and recent negative rating actions on subprime RMBS securities, the rating agency said. S&P can be found on the Web at http://www.standardandpoors.com.