The outcome of a pair of lawsuits playing out in US and UK courtrooms could have a ratings affect on structured finance transaction that have material derivative exposure to US-based counterparties, Fitch Ratings said. The two related cases involve bankrupt Lehman Brothers and a dispute over subordinate swap termination payments to the rated noteholders of synthetic collateralized debt obligations (CDO). “A final outcome favorable to the Lehman bankruptcy estate (Lehman) could have implications not only for synthetic CDOs, but for global [structured finance] transactions generally due to the widespread use of the subordination provisions within securitization structures,” Fitch said in a report Friday. “The ultimate outcome and timing for resolution of the court cases remains uncertain at this stage, thus any potential rating action is by no means inevitable or imminent” Fitch added if Lehman does prevail in court, and no other counter-party risk mitigants are present in the transactions, it will cap the credit ratings of notes in synthetic structured finance transactions to the credit rating of the credit default swap counterparty where the counterparty may be subject to US bankruptcy proceedings. Write to Austin Kilgore.