S&P Lowers Thousands of Ratings to 'D'

Reflecting continuing loan performance woes, Standard & Poor's has downgraded to "D" thousands of often already speculative-grade ratings on U.S. residential mortgage-backed securities, especially in the alternative-A credit sector. S&P also put thousands of U.S. RMBS ratings on watch. In the alt-A sector, S&P downgraded 1,078 alt-A ratings from 650 deals. In the subprime credit sector, it downgraded 737 ratings on 516 transactions. It also downgraded 117 ratings from 94 prime deals. In addition, downgrades also hit 89 ratings on 68 closed-end second-lien deals. Seventy-three ratings from 48 scratch-and-dent RMBS deals have slid to "D." S&P also downgraded 11 classes from a miscellaneous set of seven RMBS deals in which four of the downgraded classes are backed by re-REMIC transactions, three are backed by seasoned loan collateral, two are backed by home equity line of credit collateral, one is backed by prime-conforming collateral and one is backed by first-lien high loan-to-value collateral.