More Subprime Woes to Come

Bond-rating agencies warn of downgrades, and many more borrowers could default as ARM rates rise over the next year

The subprime storm isn't blowing over. On July 10, credit-rating agencies Moody's Investors Service and Standard & Poor's (like BusinessWeek, a unit of The McGraw-Hill Companies (MHP)) warned of greater-than-expected losses for bonds backed by subprime loans—news that helped send stocks tumbling.

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