Two of Alesco Financial's (AFN) CDOs, Kleros Real Estate CDO I and Kleros Real Estate CDO II, were gouged by Moody's today. The downgrade affected $64.7 million of Kleros I tranches and $219.7 million of Kleros II tranches.
Alesco had previously warned in a September 4, 2007 8-K that these two CDOs had failed overcollateralization tests, thus AFN would no longer receive cash flow from the retained mezzanine and equity tranches. Nonetheless, Moody's cut previously AAA-rated tranches in both CDOs, damaging Alesco's reputation in the collateralized debt obligation market and making potential buyers think twice about purchasing from Alesco.
Shares of Alesco were under pressure today, down over 3% at last glance.
Alesco had previously warned in a September 4, 2007 8-K that these two CDOs had failed overcollateralization tests, thus AFN would no longer receive cash flow from the retained mezzanine and equity tranches. Nonetheless, Moody's cut previously AAA-rated tranches in both CDOs, damaging Alesco's reputation in the collateralized debt obligation market and making potential buyers think twice about purchasing from Alesco.
Shares of Alesco were under pressure today, down over 3% at last glance.
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