“I’d like to know: Why now?” Steven Eisman, a portfolio manager at Frontpoint Partners in New York said on a conference call hosted by S&P to discuss the possible ratings changes. “The news has been out on subprime now for many, many months. The delinquencies have been a disaster for many, many months. The ratings have been called into question for many, many months. I’d like to know why you’re making this move today instead of many months ago.”
Tom Warrack, an S&P managing director, said it takes time for performance to show through.
“We have been surveilling these deals actively on a regular basis beginning in 2005 and 2006,” Warrack said on the call. “We believe that the performance that we’ve been able to observe now warrants action.”
In response to the investor criticism, executives at S&P, Moody’s and Fitch have said they were waiting until foreclosure sales of homes proved that the collateral backing the bonds has declined enough to create losses.
Fran Laserson, a spokeswoman for Moody’s, and James Jockle, a spokesman for Fitch, said they had no immediate comment.
