Last Wednesday Standard & Poor's raised the ratings of five classes of outstanding paper issued by former First Union Corp. unit The Money Store Inc., while simultaneously downgrading one class to below investment-grade status, the company said.

Raised to AAA from AA+ was the MV-1 class of TMS 1997-C offering and the MV-1 class of TMS 1997-D offerings, each backed by 30-year, adjustable-rate, first-lien, subprime home-equity loans.

Raised to AA+ from AA was the MH-1 class of the TMS 1997-D offering, backed by 15 to 30-year first-, second- and third-lien, subprime, home-improvement loans.

Raised to A+ from A was the MV-2 class of the TMS 1997-C and the MV-2 class of the 1997-D issue, backed by 30-year, adjustable-rate, first-lien, subprime home-equity loans.

"The TMCS certificates with raised ratings satisfy the upgrade tests for their respective new rating levels assuming credit support steps down to its floor today," said S&P ratings analyst Arthur Bolden. "Current credit support percentages average approximately two times the loss coverage levels relating to the new rating," he added.

Lowered to BB from BBB was the BH class of TMS 1998-B offering, backed by backed by 15 to 30-year first-, second- and third-lien subprime home-improvement loans.

Commenting on the downgrade, Bolden said: "The 1998-B BH credit rating was lowered to reflect the stress on overcollateralization being caused by losses consistently outpacing excess cashflow production. Since October 2000, monthly net losses have averaged approximately 1.6 times monthly excess interest."

Also, the ratings of all other outstanding Money Store paper was affirmed at its current rating.

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