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Moody's Investors Service Inc.

Moody's Upgrades Ratings of 18 Bonds from 11 US Residential Mortgage-Backed Transactions

Strategic Insights

— 1 min read

Moody's Investors Service has issued an update on the ratings of several US residential mortgage-backed transactions, upgrading the ratings of 18 bonds from 11 transactions backed by Alt-A and subprime mortgages issued by Bear Stearns. The upgrades reflect the current levels of credit enhancement available to the bonds, recent performance, and updated loss expectations on the underlying pools.

Key Takeaways:

  • Moody's upgraded the ratings of 18 bonds from 11 US residential mortgage-backed transactions backed by Alt-A and subprime mortgages issued by Bear Stearns.
  • The upgrades reflect the current levels of credit enhancement available to the bonds, recent performance, and updated loss expectations on the underlying pools.
  • Moody's has upgraded the ratings of several bonds from transactions such as Bear Stearns ALT-A Trust 2005-7, Bear Stearns ARM Trust 2005-9, and Bear Stearns Asset Backed Securities I Trust 2005-AC1.
  • The upgrades indicate that Moody's has reduced its loss expectations on the underlying pools, reflecting the current levels of credit enhancement available to the bonds.
  • The rating actions reflect the recent performance, analysis of the transaction structures, updated loss expectations on the underlying pools, and revised loss-given-default expectation for each bond.
  • Moody's has also highlighted the importance of credit enhancement, transaction performance, and loss expectations in determining the rating actions.

Statistics:

  • 18 bonds from 11 US residential mortgage-backed transactions have been upgraded by Moody's.
  • The bonds upgraded are backed by Alt-A and subprime mortgages issued by Bear Stearns.
  • The upgrades reflect a reduction in loss expectations on the underlying pools.
  • Moody's has upgraded the ratings of bonds from several transactions, including Bear Stearns ALT-A Trust 2005-7, Bear Stearns ARM Trust 2005-9, and Bear Stearns Asset Backed Securities I Trust 2005-AC1.
  • The rating actions reflect the current levels of credit enhancement available to the bonds.

Sources:

  • Moody's Investors Service
  • https://www.moodys.com/viewresearchdoc.aspx?docid=PBS_ARFTL509279
  • "US Residential Mortgage-backed Securitizations: Surveillance" published in December 2024
  • "Moody's Approach to Rating Structured Finance Interest-Only (IO) Securities" published in April 2024
  • https://ratings.moodys.com/rmc-documents/433953
  • https://ratings.moodys.com/rmc-documents/418262
  • https://ratings.moodys.com/

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