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Moody’s could downgrade 27 sub-prime RMBS

Moody’s ratings agency has revealed that it has put 27 sub-prime residential mortgage backed securities on possible downgrade review.

Moody’s says it may downgrade several of the RMBS issued by Goldman Sach’s Money Partners, Britannia’s Platform, Merrill Lynch, GMAC RFC, RBS’ ABN Amro and Lehman Brothers.

In total, Moody’s says it may downgrade 133 affected tranches spread across the securities as it assess each portfolio over the next six months.

It says the rating actions were prompted by further deterioration of the collateral performance at levels higher than those currently expected by Moody’s.

Moody’s says for example, one of the Lehmans Brothers securities has 90+ delinquencies, including outstanding repossessions, equal approximately to 42 per cent of the current portfolio balance.

As part of our review, it is also considering the concerns the FSA raised last week with regard to continued weaknesses in the way specialist lending firms and third party administrators are handling mortgage arrears and repossessions. Moody’s says these sub-prime RMBS could be further changed if the FSA demands more loan modifications.


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