The credit ratings of 10 Asia-Pacific collateralised debt obligations were cut by Standard & Poor’s because the US credit crisis led to a reduction in the value of the securities.
The ratings of the investment-grade CDOs, including the Morgan Stanley ACES SPC 2007-21, were cut by one or two levels to as low as BBB+, the third-lowest investment grade, S&P said in an e-mailed statement. ?This was caused by the rating downgrades of maybe one or two of the corporate bonds in the underlying portfolio, none of which were residential mortgage-backed securities,? said Alisha Treacy, an analyst at S&P in Melbourne. CDOs repackage bonds, loans and credit-default swaps and use the income to pay investors.
?Bloomberg
