40 residential MBS for downgrade: Moody’s

A group of 40 residential mortgage-backed security resecuritization tranches are facing possible ratings downgrades from Moody’s. The tranches, which have a current balance of $500 million, were all issued between 2005 and 2008 and contain subprime RMBS and other underlying securities whose loss projections have amplified in recent months. Moody’s said that it’s important to evaluate the elements that comprise the tranches, should a downgrade be enacted. “Because the ratings on the notes in the resecuritization are linked to the ratings on the underlying securities and their mortgage pool performance, any rating action on the underlying securities may trigger a further review of the ratings on the notes in the resecuritization,” Moody’s said in a statement. TRD