Two certificates from SG Mortgage Securities Trust 2006-FRE1 have been downgraded by Moody's Investors Service.Class M-10 was downgraded from Ba1 to Ba2, and class M-11 was downgraded from Ba2 to B2. The reason for the downgrades is that credit enhancement levels may be low given the projected losses on the underlying pools, Moody's said. The transaction " has built up a large delinquency pipeline of approximately 13% in foreclosure" and real estate owned compared with the available overcollateralization, according to the rating agency. The deal consists of subprime, primarily first-lien, adjustable- and fixed-rate loans.

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