S&P May Cut $57 Bln Subprime Debt, Reviewing Loss

Reuters (04/16/08); Siew, Walden
Standard & Poor's is considering cutting $57.1 billion of subprime-related debt because of rising delinquencies and a deteriorating outlook. Over the next few weeks, S&P will likely lower many ratings due to monthly performance data showing higher delinquencies and foreclosures for deals issued in the first six months of 2007, according to the rating company. "Today's rating actions incorporate our most recent economic assumptions and reflect our expectation of further defaults and losses on the underlying mortgage loans," S&P said in a statement. The firm is reviewing loss expectation for more than 17 percent of U.S. subprime debt deals issued in the first half of last year, as well as rated collateralized debt obligation transactions with exposure to the affected U.S. subprime mortgage debt.