Bear Stearns is Down because of Alt-A

Moody's on Monday downgraded 163 tranches from 15 transactions issued by Bear Stearns Alt-A Trust. The downgrades affected securities issued from 2005 through 2007, with ratings falling to various levels according to the degree of riskiness of the tranche. Seventy-eight of the downgraded tranches remain on review for possible further downgrade, while another 155 tranches were put on review for a first possible downgrade. Bear Stearns, which with Lehman Brothers Holdings, has been one of Wall Street's biggest originators of residential mortgages and packagers of the mortgages into securities, has about $6 billion of exposure to Alt-A mortgages that it hasn't sold, according to a recent estimate from analyst David Trone of Fox-Pitt Kelton Cochran Caronia Waller. Lehman, which on Monday began laying off 5% of its work force, is believed to have exposure to about $15 billion of Alt-A mortgages.