The worst of severe rating cuts of collateralized debt obligations tainted by U.S. subprime mortgages is probably over and 2008 should begin a "healing process," a senior director at Fitch Ratings said.Got to love those subprime mortgages! Here is the rest of the article...
Deteriorating value of U.S. subprime mortgage debt has resulted in $67 billion of rating cuts of CDOs by Fitch, including top-tier "AAA"-rated debt that now has been lowered on average to "BB"-rated debt known as junk bonds.
Asked if Fitch expects further CDO downgrades ahead, Richard Hrvatin, a managing director at Derivative Fitch in New York, said the worst cuts were behind.
"I never say never, but I think the answer is the rating action that we've taken is meant to be adding stability to the ratings," Hrvatin said on Sunday, during the Opal Financial Group CDO Summit. "I think the answer to that question is no."
Fitch last month completed a global review of CDOs tied to deteriorating subprime mortgage debt resulting in total downgrades of $67 billion, including affirmations of $10.7 billion of structured finance CDOs across 158 deals.
Monday, December 3, 2007
Severe CDO Rating Cuts Over...
While reading over at Money Central I saw this article which caught enough of my attention while drinking my coffee...
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