The SIV unease continues to unfold with more drama. Moody's Investor Service announced recently that 16 SIVs, holding approximately $30.3 billion of debt securities, have been placed on review and face possible downgrade. Among the carnage are some of the more established vehicles from veteran players like Citigroup, Rabobank and HSBC. The negative news sent pricing spreads spiraling out to crisis-mode levels.

Just last week, Fitch Ratings announced that it had downgraded Axon Financial MTN and CP to CCC/ ShortTerm C' and its mezzanine notes were also downgraded to CC.' In addition, the agency placed Sedna second priority senior notes on Rating Watch Negative. The negative news sent pricing spreads spiraling out to crisis mode levels. Analysts at Deutsche Bank said that European asset-backed floater spreads have retraced much of the tightening seen since early September. "SIVs require a liquid market and stable spreads, and we don't have either in Europe right now," said one investor who is currently trying to walk away from his SIV investment. "I've been expecting the ratings agencies to take action, but with double spread widening, I'm probably toast."

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