(Bloomberg) -- Standard & Poor's, Moody's Investors
Service and Fitch Ratings are masking burgeoning losses in the
market for subprime mortgage bonds by failing to cut the credit
ratings on about $200 billion of securities backed by home
loans.
The highest default rates on home loans in a decade have
reduced prices of some bonds backed by mortgages to people with
poor or limited credit by more than 50 cents on the dollar and
forced New York-based Bear Stearns Cos. to offer $3.2 billion to
bail out a money-losing hedge fund. Almost 65 percent of the
bonds in indexes that track subprime mortgage debt don't meet
the ratings criteria in place when they were sold, according to
data compiled by Bloomberg.
Read more at Bloomberg Bonds News
Service and Fitch Ratings are masking burgeoning losses in the
market for subprime mortgage bonds by failing to cut the credit
ratings on about $200 billion of securities backed by home
loans.
The highest default rates on home loans in a decade have
reduced prices of some bonds backed by mortgages to people with
poor or limited credit by more than 50 cents on the dollar and
forced New York-based Bear Stearns Cos. to offer $3.2 billion to
bail out a money-losing hedge fund. Almost 65 percent of the
bonds in indexes that track subprime mortgage debt don't meet
the ratings criteria in place when they were sold, according to
data compiled by Bloomberg.
Read more at Bloomberg Bonds News
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