Standard & Poor's has revised its criteria for certain federal government-enhanced housing bonds. This could affect the ratings of bond issues that are secured by mortgages that are insured or guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae or FHA if the bonds are reliant on investment earnings for full and timely payment. Specifically, it could affect "the ratings on issues that rely on market rate investment earnings to meet debt service payments for the term of the bonds...unless cash flows have been previously analyzed based on a zero rate of earnings," S&P said. S&P has placed a total of 632 issues on CreditWatch with negative implications as a result.
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