Four classes of notes issued by Gleacher CBO 2000-1 were downgraded by Moody's Investors Service today. The tranches affected were: the $276M Class A Floating Rate Notes due May 9, 2012 were downgaded to Baa1 from A2; the $33M Class B-1 Floating Rate Notes due May 9, 2012 were downgraded to B1 from Ba3; the $10M Class B-2 Fixed Rate Notes due May 9, 2012 were downgraded to B1 from Ba3; the $13M Class C Floating rate Notes due May 9, 2012 were downgraded to Caa3 from B1; the $21M Class D-1 Floating Rate Notes due May 9, 2012 were downgraded to Ca from Caa3; and the $5M Class D-2 Fixed Rate Notes due May 9, 2012 were downgraded to Ca from Caa3. According to Moody's, the CBO is failing the required rating distribution test by more than 2000 points and is holding a 42% concentration in assets rated Caa1 and below. Moody's also noted that the issuer is failing the minium coupon test mainly due to a 10% exposure to "step-up" securities that are currently paying 0%.
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Known for subprime financing, the sponsor has been making inroads lending to near-prime customers in the last couple of years.
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Spreads ranging from 16-18 basis points over the three-month, interpolated yield curve on the P1 (Moody's) and F1+ (Fitch) notes, to 160 to 170 over the benchmark on the class D notes.
April 25 -
Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
April 25 -
Broken down by product type, the agency's NJCLASS Standard Fixed product should account for a large majority of the loans, 75.4%. NJCLASS Consolidation will account for the next-largest group, 14.1%.
April 24 -
Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
April 24 -
The notes will price against Treasurys, with spreads expected to fall between 85 and 90 basis points over the benchmark.
April 24