The breadth of downgrades - and the resulting liquidations and margin calls - upended the U.S. subprime RMBS market in July. But the downgrades are far from over, market participants say, and many expect a repeat of the July experience.

"We had projected prior to the massive subprime rating actions in July that 80% of the 2006 subprime BBB-'s are likely to be downgraded, and I think we are still far from that," said Wen Zhang, an ABS research analyst at Credit Suisse. So far, about 40% of the 2006 subprime BBB-'s were downgraded, according to Zhang's colleague, Xinhui Tang.

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