A barrage of ratings actions assaulted the harrowed manufactured housing sector with all three major rating agencies taking action on transactions from seven different issuers in the past three weeks. Six of the seven issuers had deals downgraded, mostly due to higher-than-expected defaults and loss severities. Only one issuer, Vanderbilt Mortgage, actually had its deals upgraded. "This is likely the result of the agencies doing their yearly reviews and realizing that many existing transactions are still on a trend of poor performance," speculated one rating analyst, who didn't want to be named commenting on competitor's activity.
The largest crop of downgrades in terms of issuers came from Standard & Poor's as it lowered its ratings on transactions from four issuers. Four classes of Bombardier Capital's Series 1998-C as well as seven classes from that issuer's Series 1999-A transaction were downgraded. Associates Corp. Manufactured Housing Contract Pass-Thru Series 1996-2 and UCFC Funding Corp. Manufactured Housing Pass-Thru Certificates Series 1998-3 each had two classes downgraded by S&P. Rounding out S&P's crop of February MH downgrades was Indymac Mortgage Manufactured Housing Contract Pass-Thru Trust 1998-2, with four tranches downgraded and removed from Creditwatch negative.