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Brazilian Personal Loan ABS Index: Loss And Delinquency Ratios Remain Under The Microscope Mar 08
Standard & Poors, March 2008
Abstract
In the second half of 2007, consumer confidence and local banks' expansion into offering loans that are repaid through automatic payroll deductions fired up originations in the Brazilian personal loan market. However, the issuance of asset-backed securities (ABS) backed by personal loans actually decreased because liquidity was available elsewhere, namely the equity and unsecured loan markets. As of December 2007, Standard & Poor's Ratings Services had monitored Brazilian reais (R$) 856 million (approximately US$ 483 million) in 14 Brazilian credit receivables funds (Fundo de Investimento em Direitos Credit-rios, or FIDCs) backed by this asset type. These ABS transactions performed well, but delinquencies and loss rates have shown some deterioration. We're expecting these rates to increase in the next few months...
Companies mentioned in this report are: Brazil (Federative Republic of),Banco BMG S.A.
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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