Fitch Ratings on Wednesday downgraded 6 CDO asset manager ratings (also called CAM ratings), citing “adverse credit developments in the residential mortgage-backed securities sector and their consequences for structured finance collateralized debt obligations.” The rating agency also affirmed 7 CAM ratings, and placed an additional 4 asset management operations on negative ratings watch. Included among the downgrades were GE Asset Management — one of the largest managers of institutional assets in the United States and a subsidiary of the General Electric Company — among other CDO asset managers, including a unit of global financial services provider Rabobank. The GE unit saw its CAM rating dropped to ‘CAM3+’ from ‘CAM2-.’ From the press statement, a discussion of the downgrade at GE Asset Management:
…above average deterioration in portfolio quality of its 2007 vintage CDO in addition to tranche rating actions taken on its mezzanine 2005 CDO. GEAM manages four CDOs – three mezzanine CDOs and one high grade transaction. Other key drivers of GEAM’s rating action include high levels of staff turnover of both the portfolio managers and senior research staff of the structured products group.
Other asset managers downgraded included Declaration Management and Research, LLC; Duke Funding Management, LLC; Trust Company of the West; and Vertical Capital, LLC.