Fitch to Downgrade CDO's
By Anusha Shrivastava
Fitch Ratings warned that $36.8 billion of collateralized-debt-obligation transactions face downgrades, with the bulk carrying the highest, triple-A, rating.
CDOs use sliced and diced assets like subprime-mortgage bonds to create customized products that are tailored for investors' appetite for risk.
Fitch said two-thirds of the $23.9 billion in triple-A-rated CDOs on watch for a ratings cut face severe downgrades, with the revised ratings likely to be the lower rungs of investment-grade or speculative grade, or junk. WSJ
Translation: Um, we got it wrong the first time.
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