S&P Eyes 206 Classes in CDOs of ABS

Standard & Poor's Ratings Services has placed 206 classes from 94 U.S. cash flow and hybrid collateralized debt obligations of asset-backed securities on CreditWatch negative. S&P attributed the negative rating actions to "continued deterioration in the credit quality of the residential mortgage- backed securities backing these CDO transactions." The rating agency said 58 of the 94 affected CDOs are mezzanine structured finance CDOs collateralized substantially by RMBS and other structured finance assets rated single-A and triple-B at origination. Twenty-six are high-grade structured finance CDOs of ABS backed largely by RMBS and other structured finance assets rated single-A through triple-A at origination, and the remaining 10 are CDOs of CDOs backed chiefly by tranches from other CDO transactions, the rating agency said.