Nearly 20,000 Downgrades — and Counting


	Nearly 20,000 Downgrades — and Counting

BobbyDelray

12-6-2007 3:02 PM

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tags:

downgrades, subprime, collateralized debt, securities, distressed

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/f95ab070-9938-4770-8b9e-9c86bc46b857/BA52AA11-523B-4C16-B08A-A02ECC53EC21/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/" href="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/" style="font-size: 11px;">blogs.wsj.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/">The tsunami of subprime-related bond downgrades this quarter sent shockwaves throughout the financial markets. Now that the tide has weakened, <STRONG>analysts are surveying the wreckage</STRONG>.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/">According to research from Deutsche Bank, credit rating companies Moody’s Investors Service, Standard & Poor’s and Fitch Ratings have<STRONG> issued an unprecedented 19,795 debt downgrades so far this year among securitized assets</STRONG>.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/">That compares with the 2,539 separate downgrades they issued for all of 2006, and the previous annual record for downgrades, which was 4,168 in 2003.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/"><STRONG>The percentage of subprime-mortgage-backed debt affected by downgrades is much higher</STRONG> – for example, 58% of collateralized debt obligations backed by subprime collateral that were issued from 2005 to 2007 have been downgraded </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/"> “Even more alarming is the degree to which very highly rated securities seem to have deteriorated overnight</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blogs.wsj.com/marketbeat/2007/12/05/nearly-20000-downgrades-and-counting/">some securities issued by collateralized debt obligations had their ratings slashes from triple-A to “distressed”</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/BA52AA11-523B-4C16-B08A-A02ECC53EC21/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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