S&P: PHH on developing watch

Standard & Poor's said it placed its BBB-/A-3 counterparty credit rating on PHH Corp. on CreditWatch with developing implications.

The rating had been placed on CreditWatch with positive implications on March 15, 2007, following the announcement that PHH had entered into a definitive agreement to be acquired by General Electric Capital Corp. (AAA/stable/A-1+), the agency said.

The agency said that this CreditWatch revision reflects the possibility that the acquisition

will not close as planned, necessitating a reassessment of its existing ratings on PHH in light of the industry-wide decline in mortgage originations and continued turbulence within the secondary mortgage markets.

Should the transaction still close as planned, S&P said it will raise its ratings on PHH to reflect the potential benefits to the company's debt holders of GECC's ownership.

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