Fitch Downgrades 281 U.S. RMBS Bonds

Another wave of downgrades has hit U.S. residential mortgage-backed securities transactions as the Fitch ratings on 281 bonds in 267 transactions have dropped to D, indicating a principal writedown. The move followed a review of bonds that had speculative grade ratings ranging from CCC to C, indicating a default was expected. Ninety-eight percent of the bonds had CCC ratings. Ninety-eight percent had an outstanding recovery rating of RR6 indicating that minimal recovery was expected. Only the bonds with writedowns were included in the review. Of the 267 transactions impacted, 143 were prime credit deals and 115 were subprime credit deals. Fitch said the balance were "other" product types.