While many people seem critical of bond ratings, saying AAA ratings did not honestly and truthfully rate bonds correctly, S&P has lowered ratings on bonds issued as far back as 2005. Is this 20-20 hindsight, a cover-your-butt move, or simply a no-brainer? That is for you to decide. Here is what happened:
Standard & Poor’s lowered ratings on about $22 billion of securities backed by first-lien subprime home loans because of rising delinquencies. The cut covers 1,413 classes of bonds from the fourth quarter of 2005 through the fourth quarter of 2006, the New York-based ratings company said today in a statement. S&P two days ago lowered ratings on $23.4 billion of subprime and Alternative-A securities that were created as recently as June, its swiftest downgrade of mortgage bonds.