The subprime crisis is now expected to spread to bond mutual funds, as many hold securities tied to subprime debt, the Associated Press reports.

And the reason so many of these funds had this exposure is that the ratings agencies erred in giving these instruments high marks. In fact, about 80% of bonds backed by subprime mortgages is rated triple-A, the same as U.S. Treasury bonds, and as much as 40% is backed by delinquent credit cards.

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