Over the past couple of weeks, Moody’s Investors Service has downgraded credit ratings on more than 30 bonds issued last year that were backed by subprime home mortgage loans. The downgrades underscore continued concern over the viability of subprime loans, but they also call into question Moody’s credit-rating methodology. “It’s embarrassing for a ratings company to downgrade bonds so quickly” after the bonds were issued, said Paul Ullman, chief executive of the hedge fund HFH Group. “It reflects poorly on all parties in the underwriting process and their judgment of the credit-worthiness of the bonds.” more [WSJ]
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Moody’s feeling subprime sting
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