Reply #72: Moody's sees Dana bankruptcy having some CDO impact

[UpInArms]

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyid=2006-03-06T170003Z_01_N06267241_RTRIDST_0_MARKETS-DANA-CDOS.XML

NEW YORK, March 6 (Reuters) - Moody's Investors Service said on Monday that the bankruptcy filing of car and truck parts supplier Dana Corp. (DCN.N: Quote, Profile, Research) will have "some" impact on the ratings of U.S. collateralized debt obligations.

Dana filed for Chapter 11 protection from creditors on Friday, citing general financial deterioration in the auto industry and its inability to renew or expand credit facilities in a timely manner as reasons for its bankruptcy.

Moody's said it has rated 120 U.S. CDOs that have exposure to both Dana Corp. and its finance unit Dana Credit Corp., 96 of which are "cash deals," which are typically backed by loans or bonds, while 24 are "synthetic," meaning they are backed by credit-default swaps.

Collateralized debt obligations, or CDOs, are portfolios of bonds, loans, asset-backed or other securities. Investors can buy bonds backed by the portfolios, and choose among different options for how much risk to take -- and how big a yield to earn.

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