Wednesday, February 4, 2009

The Elephant in the Room

From Bloomberg News: Moody's updates key assumptions for rating CLOs

From Expect[ed] Loss:


Update 2 (08.12.09): S&P announces it "may offer a new type of rating on U.S. home-loan bonds reflecting its expectations for how much might be recovered after the securities default." The “stressed recovery ratings” would apply to prime, Alt-A and subprime mortgage bonds with credit ratings of BB+ or below that had originally been granted AAA ratings.

1 comment:

Anonymous said...

this is good thanks. at best, loans now trading in 50s and 60s. can't keep such high recovery rate assumptions for them even if these are long term products.