S&P Eyes GEMICO MBS Deals

Standard & Poor's Ratings Services has announced that it is evaluating its ratings on various residential mortgage-backed securities insured by General Electric Mortgage Insurance Corp. as a result of the recent lowering of GEMICO's counterparty credit and financial strength ratings.The ratings were lowered from AAA to AA after GEMICO said it would operate its domestic business at capital levels consistent with double-A ratings (which are prevalent in the industry) to free up excess capital. The RMBS transactions under review by S&P have been seasoned seven to 17 years, except for one that was issued in 2000, the rating agency said. The amortized loan-to-value ratios for many of the pools are below 60%. "In addition to current pool performance, Standard & Poor's will also take into consideration the market value appreciation, especially its impact on the underlying collateral during the past five years," said S&P credit analyst Ernestine Warner. "The amortized LTVs and credit enhancement structures will also be analyzed to determine if rating actions are warranted." S&P can be found online at http://www.standardandpoors.com.