Last week, Moody's Investors Service downgraded several classes, including former Aaa' rated seniors, of securitizations from First International Bank, a subsidiary of UPS Capital. According to the rating agency, this is the first instance of a Moody's rated small business loan deal containing Small Business Association 7(A) loans to be downgraded.

FIB's last securitization closed in 2000, prior to UPS Capital's acquiring the regional bank lender. The downgrades were based on collateral deterioration as much of FIB's loans were extended to companies in the manufacturing sector. Sources said UPS Capital is originating loans, though the company has not visibly securitized any of those assets.

According to a story that appeared last week in the Wall Street Journal, employment in the manufacturing sector has been declining for 29 consecutive months.

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