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Global Financial Institutions Eye Another Wave Of Write-Downs As U.S. Housing Woes Spread Sep 08
Standard & Poors, Sep 2008
Abstract
The pain of the global financial industry remains largely linked to the declining fortunes of the U.S. housing sector. Securities backed by U.S. mortgage loans have lost hundreds of billions of dollars in value since summer 2007. The losses have spread beyond subprime, which represents only 10%-15% of residential real estate borrowing in the U.S., to other pressured areas of U.S. housing finance. Three prominent players--Citigroup Inc. (AA-/Negative/A-1+), Merrill Lynch & Co. Inc. (A/Watch Dev/A-1), and UBS AG (AA-/Negative/A-1+)--account for 40% of the more than $300 billion in write-downs of mortgage-backed securities (MBS) and leveraged loans taken through the first half of 2008. Beyond that concentration, the write-downs have been spread geographically and by institution. Intermediaries and investors across the...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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