Standard & Poor's last night downgraded sub-prime mortgage backed securities worth $6.4bn (€4.6bn), after it was forced to restate the value of securities at risk in a credit watch announcement made earlier this week.

Last night's rating action saw 498 downgrades on securities worth $5.69bn, while 26 classes remain on credit watch and the ratings on 74 classes were affirmed. The downgrades represent 1.01% of the $565.3bn in US residential mortgage backed securities backed by first-lien sub-prime collateral rated by S&P between the fourth quarter of 2005 and the fourth quarter of last year.