Six classes of notes from Sharps CDO I, a static cash flow collateralized debt obligations backed partly by alternative-A residential mortgage-backed securities, have been downgraded by Fitch Ratings. The downgrades were as follows: class A-1, from AAA to A-minus; class A-2, from AAA to A-minus; class B, from AA-plus to CC; class C, from A-plus to C; class D, from BBB to C; and class E, from BB to E. The downgraded classes were all removed from Rating Watch Negative. Fitch attributed the downgrades to "significant collateral deterioration" in the portfolio's alt-A RMBS. Approximately 63% of the portfolio has been downgraded since the transaction closed in December 2006, the rating agency said.
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