Fitch Downgrades 2 Classes of BEA CBO 1998-1 Ltd.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch has downgraded two classes of notes issued by BEA BEA - Basic programming Environment for interactive-graphical Applications, from Siemens-Nixdorf. CBO CBO See: Collateralized Bond Obligation. 1998-1 Ltd. (BEA 1998-1), effective immediately: --$13,508,441.71 class A-2A notes downgraded to 'C/DR4' from 'CC/DR3'; --$2,361,615.71 class A-2B notes downgraded to 'C/DR4' from 'CC/DR3'; --$26,000,000 class A-3 notes revised to 'C/DR6' from 'C/DR5'. BEA 1998-1 is a collateralized debt obligation Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, (CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the ) that closed May 21, 1998 and is managed by Prudential Investment Management, Inc. (Prudential). Prudential took over management from BEA Associates after BEA 1998-1 entered an event of default in September 2002. BEA 1998-1's portfolio is composed of high yield corporate bonds. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. The downgrades are the result of the deteriorating collateral coverage since the last review in May 2006. Two main factors leading to this deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. include the default of Allied Holdings in August 2005 and Keystone key·stone n. 1. Architecture The central wedge-shaped stone of an arch that locks its parts together. Also called headstone. 2. The central supporting element of a whole. Consolidated Industries in 2001 as well as the continuing diversion of principal proceeds to pay interest to the class A-3 notes on the most recent payment date in June 2007. The class A overcollateralization ratio has declined to 15.66% as of the Sept. 4, 2007 trustee report from 45.37% as of the May 24, 2006 report used for the last review. The ratings on the class A-2A and A-2B reflect the lower recovery expectations on these classes. Due to the deficiency of available interest collections, the transaction has begun to use principal proceeds to pay any shortage of interest due on the class A-3 notes. This phenomenon is expected to continue throughout the life of the transaction, resulting in continued erosion of collateral coverage. The Distressed Recovery rating has been downgraded to reflect the lower recovery expectation on the notes. The ratings of the class A-2A and A-3 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class A-2B notes addresses the likelihood that investors will receive their stated balance of principal by the legal final maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Derivative Fitch web site at www.derivativefitch.com. For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Oct. 18, 2006 and also available on Fitch's web site at www.derivativefitch.com. Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which is available on the Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.derivativefitch.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. Fitch means Fitch, Inc., Fitch Ratings, Ltd. and their subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any successor or successors thereto. |
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