Rating agency Standard & Poor's said late Thursday that it downgraded $6.39 billion of subprime residential mortgage-backed securities after warning earlier this week that cuts were coming.
The agency previously said it may downgrade 612, or $7.35 billion, of residential mortgage-backed securities (RMBS).
Of those, S&P cut ratings on 498 classes, it said on Thursday. S&P had placed another 70 classes of RMBS on CreditWatch for possible downgrade before this week. On Thursday, the agency said it was downgrading 64 of those classes.
The 562 downgrades affect roughly $6.39 billion in rated securities, or 1.13% of all RMBS first-lien subprime mortgage collateral rated by S&P between the fourth quarter of 2005 and the fourth quarter of 2006.
S&P's announcement and similar downgrades unveiled by rival agency Moody's Investors Service, were a dramatic sign that subprime mortgage woes aren't going away any time soon and could prolong a downturn in the housing market.