Estimating the valuation write-downs of sub-prime asset-backed securities at $285 billion, for the first time, international rating agency Standard & Poor?s has said the end of write-downs is now in sight for large financial institutions.
In a report ?Sub-prime Write-Downs Could Reach $285 billion, But Are Likely Past The Halfway Mark,? published on Friday, S&P noted that the figure is higher than the $265 billion it published earlier this year because since then it has increased its assumption of percentage write-downs of high-grade CDOs.
?The positive news is that, in our opinion, the global financial sector appears to have already disclosed the majority of valuation write-downs of subprime ABS,? said S&P?s credit analyst Scott Bugie, lead author of the report.
In a companion report published on Friday, ?More Subprime Write-Downs To Come, But The End Is Now In Sight For Large Financial Institutions,? S&P has said that in particular the bulk of the write-downs of subprime securities may be behind the banks and brokers that have already announced their results for full-year 2007.
?There may be some additional marks to market as market indicators have shown deterioration in the first quarter. However, when we dissect the percentage of write-downs taken against various types of exposures, in our opinion the magnitude of some write-downs is greater than any reasonable estimate of ultimate losses,? said S&P?s credit analyst Tanya Azarchs.