State Street managed CDO, Carino CDO ltd is downgraded

--The State Street-managed CDO, Carina CDO Ltd., is the first to begin unwinding after a slump in the creditworthiness of its underlying asset-backed securities, Standard & Poor's said yesterday. The company's shares fell as much as 6.7 percentafter the ratings firm slashed the CDO's most-senior class from AAA to BB, two levels below investment grade. --``There's no material financial impact,'' Carolyn Cichon, a spokeswoman for Boston-based State Street, said in a telephone interview today. ``We're just the manager.'' The company oversees about $6 billion in CDO assets. -- The Carina CDO is primarily backed by residential mortgagesecurities, other CDOs and derivative versions of each, Moody'sInvestors Service said last month. Asset-backed debt CDOs suchas Carina mainly contain assets tied to subprime mortgages,whose values have dropped amid rising defaults by U.S.homeowners. About $1 trillion of such CDOs are outstanding,according to New York-based Moody's.