Standard & Poor's Corp. cut its ratings on $5.33 billion of U.S. collateralized debt obligations Tuesday, because of credit deterioration and recent rating reductions on subprime residential mortgage-backed securities.

The agency lowered its ratings on 22 tranches from eight cash flow and hybrid CDOs. The ratings on 12 of the downgraded tranches face a significant likelihood of further downgrades.

Two of the eight transactions are mezzanine structured-finance CDOs of asset-backed securities, collateralized in large part by mezzanine tranches of residential MBS and other structured-finance securities.

Four are high-grade structured-finance CDOs of asset-backed securities, while the other two are CDOs of CDOs.

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