S&P may cut $57 bln subprime debt, reviewing loss

NEW YORK (Reuters) - Standard & Poor's on Tuesday said it may cut $57.1 billion of subprime-related debt due to continuing delinquencies and a worsening outlook, the rating company said.

S&P will likely lower many of the ratings over the next few weeks because monthly performance data shows delinquencies and foreclosures continue to rise for deals issued in the first half of 2007, the rating company said.

"Today's rating actions incorporate our most recent economic assumptions and reflect our expectation of further defaults and losses on the underlying mortgage loans," S&P said in a statement.

S&P said it is reviewing loss expectation for more than 17 percent of U.S. subprime debt deals issued in the first half of 2007, due to the latest delinquency trends, loan risks and deterioration in the rating firm's macroeconomic outlook.

It is also reviewing its rated collateralized debt obligation transactions with exposure to the affected U.S. subprime mortgage debt and will take action in a few days.

A completed global review of its rated asset-backed commercial paper conduits and structured investment vehicles, or SIVs, with exposure to these U.S. subprime bonds confirms that the ratings on the so-called conduits are not adversely affected by the rating actions, S&P said.

(Reporting by Walden Siew; Editing by James Dalgleish)