Moody’s Downgrades Some Bear Stearns Alt-A Mortgage Backed Securities
At 10:24am EST, Moody’s, the ratings agency, issued press releases downgrading a bunch of Alt-A mortgage backed securities issued by investment bank Bear Stearns (BSC) (subscription required).
This class of mortgage backed securities, of course, was responsible for the problems recently experienced by Thornburg Mortgage (TMA), which is down again on the news, and seems to have been triggered by a writedown by UBS 3 weeks ago.
Bear Stearns shares are getting hit hard – down 9% on heavy volume – though they are well off their lows since Chairman Ace Greenberg appeared on CNBC downplaying liquidity concerns.
Disclosure: Top Gun has no position in Bear Stearns (BSC) shares and is long Thornburg Mortgage (TMA).