Friday, Aug 29, 2008
Sub Prime woes hit the Costa
Telegraph: Concerns for Spanish banks after downgrade on mortgage securities
Fitch Ratings has downgraded six sets of Spanish mortgage securities issued by Banco Santander, heightening concerns that the damage from Spain's property crash is spreading to the country's strongest lenders. The loans were "sliced and diced" and packaged in an identical way to sub-prime mortgage bonds in the US, belying claims by the Spanish government that the country had avoided the sort of lending practices seen in Anglo-Saxon economies. The cluster of residential property securities, worth €4.06bn (£3.27bn), were all based on mortgages that exceeded 80pc of the house value, and many were 95pc or even 100pc. They were all issued in 2007 at the height of the property boom. Fitch downgraded the lower tier A, BBB, and BB tranches of the securities. The upper levels remain stable.
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1. plato said...
So all the princes and princesses with second+ homes on mortgages and in the sunny climes are going to morph into paupers. Surely the story doesn't end like this!