NEW YORK, Dec 21 (Reuters) - Moody’s Investors Service on Friday slashed its ratings on about $6 billion of debt issued by Victoria Finance, a structured investment vehicle sponsored by Ceres Capital Partners.
“Today’s downgrade actions reflect the steep decline in the market value of the vehicle’s asset portfolio from 98 percent (in September) to 95.5 percent,” Moody’s said in a news release.
Moody’s dropped its rating on the SIV’s U.S. and European medium-term notes by 9 notches to “Baa3,” the lowest rung of investment-grade, from “Aaa,” the highest rating.
The ratings agency said its actions take into account the partial success of an alternative financing plan the SIV has put into place.
Structured investment vehicles are funds that raise cash by issuing short-term debt and use the proceeds to buy higher-yielding assets such as U.S. mortgage bonds.
The vehicles, often created by banks, have run into trouble this year due to exposure to risky mortgages. (Reporting by Neil Shah; Editing by Tom Hals)