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Scenario Analysis: 2011 Update To Lenders' Mortgage Insurance Sensitivity Analysis On Australian Prime RMBS Nov 11
Standard & Poors, Nov 2011
Abstract
Mortgage insurance for lenders is a key pillar supporting Australian residential mortgage-backed securities (RMBS) ratings. In fact, the housing loan portfolio backing a typical prime RMBS tend to have lenders' mortgage insurance (LMI) for every loan, with the policy covering all losses within its scope. As such, LMI is a main form of credit support to the ratings on these RMBS. As part of Standard & Poor's Ratings Services' ongoing surveillance, we analyze the sensitivity of these ratings to hypothetical downgrades of LMI insurers. This annual report reflects our updated counterparty and recently revised Australian RMBS criteria. A deterioration in the financial strength of LMI insurers could affect RMBS ratings. In particular, subordinated notes would be most vulnerable. A large...
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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