Last week Standard & Poor's downgraded five classes of notes issued by Triumph Capital CBO, a $600 million cashflow deal that closed in 1999. The rating agency also affirmed three triple-A-rated notes that are guaranteed by Financial Security Assurance.

Moody's Financial Services also has ratings on the deal, though the agency has not made any announcement regarding the deal.

According to S&P, the June 8 trustee report labeled a $11 million bond in the pool as performing, when the bond has since then defaulted, and the credit rating of the obligor was downgrade to D' by S&P on June 15.

Although S&P would not confirm it, that credit is understood to be 360networks, a fiber optic service provider.

S&P analyst Swee-Fong Ng noted that the deal is failing the industry concentration limit of 8% in two categories: automotive (9.68%) and telecommunications/cellular (23.03%).

"No other CDO has a telecom industry concentration as high as 23%," Ng said. "What is interesting about this transaction is that it was still passing all of its overcollateralization tests in the June 8 trustee report."

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