The asset securitization market usually does not stop issuing new deals for any reason, except perhaps the usual holiday breaks. After enduring several days of downgrades on subprime MBS by Moody's Investors Service, and warnings of more from Standard & Poor's, however, the ABS market largely decided to hold back from issuing new debt last week.

Early last week, S&P warned that it might slash the ratings on about $12 billion worth of subprime MBS. It was the first in an onslaught of negative ratings news. Later that day, Moody's announced a series of ratings downgrades affecting subprime RMBS from 2006 first-lien subprime RMBS and subprime second-lien RMBS. It also placed another 32 securities on review for possible downgrade. On Wednesday, Moody's went further, saying it might downgrade the ratings on about 184 tranches of CDOs worth $5 billion.

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