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Rating Actions In U.K. Nonconforming RMBS Strongly Linked To Evolution In Credit Enhancement Jun 09
Standard & Poors, June 2009
Abstract
The rating actions Standard & Poor's Ratings Services has taken on U.K. nonconforming residential mortgage-backed securities (RMBS) over the past 18-24 months have been mostly negative. These actions have been caused primarily by increasing delinquencies and repossession rates, as well as higher realized losses, which affect our credit and cash flow analysis of RMBS. Furthermore, significant house price declines over the past year have caused typical loss severities to rise, and we expect prices to fall further throughout the rest of 2009. In our view, these factors are placing increased pressure on the available credit enhancement in U.K. nonconforming RMBS transactions and therefore continue to place downward pressure on ratings. We have investigated the relationship between credit enhancement and transaction...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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