Some structured finance vehicles are performing well 23 February 2009 5:30PM Philip Bayley In the structured finance sector, S&P raised by one notch all ratings assigned to the subordinated tranches of Series 2005-1 and Series 2006-1 REDS EHP Trusts notes and affirmed the 'AAA' ratings on the Class A-2 notes. The rating upgrades reflect the strong asset performance of the transactions' portfolios and increases in the percentage of credit support available for each class of notes. S&P also affirmed ratings on all classes of Mobius NCM-04 notes, backed by sub-prime and non-conforming residential mortgages, and removed the ratings on the Class C, D and M notes from CreditWatch with developing implications. The notes were placed on CreditWatch in September, in response to continuing high levels of mortgage defaults and subsequently disputed claims by The Mortgage Insurance Company Pty Ltd, leading to further charge-offs to the junior notes. S&P now says the performance of the portfolio is within expectations at each rating level.Moody's has concluded its review of Genworth Financial Mortgage Insurance Pty Ltd., initiated in October, by lowering its insurer financial strength rating to 'A1' from 'Aa3' and placing a negative outlook on the rating. The move more closely aligns the ratings of the Australian subsidiary with its parent ('Baa1' on review for possible downgrade) and the US mortgage insurance operations ('Baa2/Developing") but recognises the stronger dynamics of the Australian housing market. The negative outlook acknowledges the potential for further weakening of those dynamics.