CBO Action: Moody’s

Four classes of notes issued by Gleacher CBO 2000-1 were downgraded by Moody’s Investors Service today. The tranches affected were: the $276M Class A Floating Rate Notes due May 9, 2012 were downgaded to Baa1 from A2; the $33M Class B-1 Floating Rate Notes due May 9, 2012 were downgraded to B1 from Ba3; the $10M Class B-2 Fixed Rate Notes due May 9, 2012 were downgraded to B1 from Ba3; the $13M Class C Floating rate Notes due May 9, 2012 were downgraded to Caa3 from B1; the $21M Class D-1 Floating Rate Notes due May 9, 2012 were downgraded to Ca from Caa3; and the $5M Class D-2 Fixed Rate Notes due May 9, 2012 were downgraded to Ca from Caa3. According to Moody’s, the CBO is failing the required rating distribution test by more than 2000 points and  is holding a 42% concentration in assets rated Caa1 and below. Moody’s also noted that the issuer is failing the minium coupon test mainly due to a 10% exposure to “step-up” securities that are currently paying 0%.