Moody’s Begins Downgrading AAA-Rated Alt-A RMBS to Junk : Housing Wire: "Moody’s Begins Downgrading AAA-Rated Alt-A RMBS to Junk
By PAUL JACKSON
Published: April 24, 2008 Moody’s Investors Service issued more Alt-A downgrades on Thursday morning, this time taking a heavy hand to 32 different Aaa-rated tranches from 10 different Alt-A deals. Many of the downgrades even pushed former Aaa’s into non-investment grade categories — a stunning descent for top-rated Alt-A mortgage bonds that underscores two key points.
First, defaults are obviously accelerating. Second, many Alt-A deals were issued with less in the way of overcollateralization — which, in plain English, means that these deals will start to see downgrades sooner, compared to the relative stress that a typical subprime RMBS deal can withstand before the hits start coming at the Aaa level."
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