Standard & Poor's lowered its ratings on three tranches of RMBS from another two Bluestone Group subprime and non-conforming RMBS issues last week. Ratings on the Class BA, BZ and CA notes issued by Sapphire IX 2006-1 Trust and Sapphire X Series 2007-1 Trust were lowered to 'BBB-', 'BB-' and 'B-' from 'BBB', 'BB' and 'B',  and to 'BB+', 'B+' and 'CCC+' from 'BBB', 'BB' and 'B', respectively.With outstandings on the underlying portfolio of the first trust now reduced by 75 per cent to A$160 million, the remaining outstandings are subject to tail-end adverse selection risk. Moreover, with the date-based call option due to pass in August, coupon step-ups will come into affect and with principal repayments made on a pro-rata basis, the credit support available to notes ranked above the Class CA notes will be diminished.The ratings on all other classes of notes were affirmed.For the Sapphire X Series 2007-1 Trust, S&P noted that the underlying portfolio has paid down to less than 40 per cent of its original balance and that the call option on the RMBS can be exercised in May 2011 but coupons will step up if the call is not exercised.Moreover, the transaction has been switching between sequential and pro-rata payments of principal on the rated notes. While the pro-rata payment mechanism helps to decrease the weighted-average funding costs of the transaction, it also reduces the dollar amount of credit support available to any notes ranked above the class CA notes. In S&P's opinion, this reduces the credit quality of the rated notes as the remaining portfolio is likely to become more sensitive to potential tail-end adverse selection risk. The ratings on all other classes of notes were affirmed.S&P also raised its ratings on two tranches of notes in separate securities financing loans originated by Rams Home Loans (now RHG) in 2007. S&P lifted the rating on the Class AB notes issued by RMS Series 2007-1HE and RMS Trust Series 2007-3 to 'AAA' from 'AA+' and removed four tranches of notes from CreditWatch developing. The upgrades were due to the build-up of credit support for these tranches and resolution of the CreditWatch was due to corresponding action on the reinsurer for the LMI provider, Prime Insurance Group.