Moody’s takes axe to CDO ratings

http://www.ft.com/cms/s/0/c064b148-fb6b-11dc-8c3e-000077b07658.html

Moody’s takes axe to CDO ratings
By Paul J Davies

Published: March 26 2008 21:54 | Last updated: March 26 2008 21:54

Moody’s Investors Service unleashed a wave of ratings downgrades and negative outlooks on more than $25bn worth of complex credit products on Wednesday due to continued deterioration in the underlying assets.

The ratings actions, which affected more than 250 tranches from more than 40 deals, were mostly taken on collateralised debt obligations backed by other kinds of complex debt such as mortgage backed bonds or other CDOs.

Structured finance CDOs became increasingly important in the last stage of growth for the broader CDO and securitisation industry because they could be used to repackage bits of these other deals when they proved more difficult to sell.

Moody’s said the vast majority of the deals downgraded on Wednesday were on review for further downgrades.
Copyright The Financial Times Limited 2008

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