"S and P Cuts British Firm's Debt Rating" Writes New York Times

Aug 29 07

"S and P Cuts British Firm's Debt Rating" Writes NY Times. Standard & Poor's reduced the ratings on structured investment vehicle (SIV) Cheyne Finance from A-1 ("First Tier") to A-2 ("Second Tier"). This will begin an "unwind" of this mortgage-related SIV. SIVs, or asset-backed medium-term notes (MTNs) represent about 4-5% of money fund holdings with mortgages perhaps representing half of this total. But "senior investors, like money funds, will be paid first and 'taken out'" says Viktoria Baklanova of Fitch. U.S. money funds should be fine, though European money funds, which invest in asset-backed securities (ABS), may face issues.

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