Fitch Ratings upgraded one class of notes issued by collateralized bond obligation CAM CBO I last week. The class B notes totaling approximately $20.8 million were upgraded to BB from B+; the approximately $32.2 million in C notes remain rated at C.
The upgrade of the B notes reflects increased credit enhancement resulting from the deleveraging of the collateralized debt obligation's capital structure, Fitch said in a report. "Although the performing portfolio is becoming increasingly concentrated with only six non-impaired positions, the transaction holds approximately $9.5 million of principal collections. These funds will further delever the class B notes on the next payment date," Fitch said.
CAM CBO I, comprised mainly of high yield bonds, is managed by Conning Asset Management. The deal closed on Nov.13, 1998.
Meanwhile, Fitch downgraded three classes of notes issued by BEA CBO 1998-1 last week. The approximately $35.2 million in class A-2A notes and the approximately $6.1 million in class A-2B notes were downgraded to CC from B-. The $26 million in class A-3 notes were also downgraded to C from CC.
Fitch's downgrades reflect the vehicle's deteriorating collateral coverage since its last review in June 2005. Two factors leading to this deterioration include the default of Allied Holdings in August 2005, and the diversion of principal proceeds to pay interest to the class A-3 notes on December 15, 2005, Fitch said.
BEA CBO closed on May 21, 1998, and is managed by Prudential Investment Management. Prudential took over the vehicle from BEA Associates after the CBO entered into an event of default in September 2002.
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