Sounds a little bit like Enron, no? Or even ImClone. ----- Original Message ----- From: "raghu" <[EMAIL PROTECTED]> To: <[email protected]> Sent: Tuesday, September 04, 2007 5:42 PM Subject: [PEN-L] CDO Speeds to CCC From AAA
> According to Bloomberg, here is at least one instance of a CDO that > was downgraded from AAA all the way down to CCC. This seems a little > extreme even given the excesses of the derivatives markets. Are things > really *that* bad? > > http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSEguZCZ9ZpY > --------------------------------snip > Last week, Standard & Poor's butchered the ratings on $3.2 billion of > debt from structured investment vehicles spawned by Solent Capital > Partners LLP in London and Avendis Group in Geneva. About $254 million > was slashed from the top AAA grade to CCC+ and CCC -- slides of 16 and > 17 levels, triggered by their investments in mortgage-backed bonds. > > Think about that for a second. You left the office Tuesday owning a > AAA rated security. By the time you got back to your desk on Wednesday > morning, it was eight steps below investment grade in a category S&P > defines as ``currently vulnerable to nonpayment.'' Try explaining that > to your pension-fund trustees. > > The rating companies are sifting through the billions of dollars of > repackaged bonds and structured investment funds they graded in recent > years. You can bet the world's biggest and smallest banks are also > panning for risk in the structured investment vehicles and > off-balance-sheet companies they casually sponsored in the gold rush. > > > -raghu. >
