Forty-five classes backed by closed-end second-lien collateral in 14 securitizations from nine issuers have been downgraded by Standard & Poor's Ratings Services, as well as 11 subprime classes in nine deals from three issuers.Of the closed-end second-lien classes, 27 were placed on CreditWatch with negative implications, 12 were left on CreditWatch negative, and six were removed from CreditWatch negative, S&P reported. Of the subprime classes, five were placed on CreditWatch negative, four remain on CreditWatch, and two were removed from CreditWatch. In addition, the ratings on 46 other classes (from 11 issuers) backed by closed-end second-lien collateral were placed on CreditWatch negative, as were 31 other classes (from 15 issuers) backed by subprime collateral. S&P said the downgrades and CreditWatch placements "reflect early signs of poor performance of the collateral backing these transactions." For the closed-end second-lien transactions, the percentage of severely delinquent (90-plus days, foreclosure, and real estate owned) loans in the pools ranges from 3.30% to 18.20% of the current pool balances, S&P reported. For the subprime transactions, the comparable percentages range from 5.27% to 17.06%. The rating agency can be found online at http://www.standardandpoors.com.

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