myusatonyatlas
12-06-2007, 11:20 AM
First Marblehead Shares Battered
By Possible Student-Loan Defaults
Stock Takes 30% Dive
In Two Days as Moody's
Reviews Array of Notes
By ***** J. WINSTEIN
December 6, 2007; Page C2
Shares of First Marblehead (http://online.wsj.com/quotes/main.html?type=djn&symbol=fmd) Corp. fell 30% over two trading sessions after bond-rater Moody's (http://online.wsj.com/quotes/main.html?type=djn&symbol=MCO) Corp. indicated that worries about complex asset-backed securities have spread to a new realm: student loans.
First Marblehead, based in Boston, is a leading player in packaging student loans into structured securities. On Tuesday, Moody's put 16 notes structured by the company under review for possible downgrade -- a reaction to rising default rates in the loans underlying the notes.
Moody's added two more notes to its review yesterday, bringing the total to $935 million in issued value. Moody's also said it was considering a downgrade to the investment-grade rating of the Education Resources Institute Inc., or TERI, guarantor of almost all of the loans packaged in First Marblehead-created securities.
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By Possible Student-Loan Defaults
Stock Takes 30% Dive
In Two Days as Moody's
Reviews Array of Notes
By ***** J. WINSTEIN
December 6, 2007; Page C2
Shares of First Marblehead (http://online.wsj.com/quotes/main.html?type=djn&symbol=fmd) Corp. fell 30% over two trading sessions after bond-rater Moody's (http://online.wsj.com/quotes/main.html?type=djn&symbol=MCO) Corp. indicated that worries about complex asset-backed securities have spread to a new realm: student loans.
First Marblehead, based in Boston, is a leading player in packaging student loans into structured securities. On Tuesday, Moody's put 16 notes structured by the company under review for possible downgrade -- a reaction to rising default rates in the loans underlying the notes.
Moody's added two more notes to its review yesterday, bringing the total to $935 million in issued value. Moody's also said it was considering a downgrade to the investment-grade rating of the Education Resources Institute Inc., or TERI, guarantor of almost all of the loans packaged in First Marblehead-created securities.
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