The turmoil suffered by the US sub-prime loans market has spread to the next level of mortgages, as Bear Stearns was forced to bail out one of its funds investing in securities based on the risky asset class and Bill Gross, Pimco's chief investment officer, forecast doom for the sector.

Standard & Poor's Ratings Services said in a report that 4.2% of Alt-A loans for the 2006 vintage are 90 or more days delinquent, 2.5 times higher than the previous year's figure and more than four times that of the 2004 deals.