Bangkok--16 Feb--Fitch Ratings
Link to Fitch Ratings' Report: 2011 Outlook: Non-Japan Asia Structured Finance
Fitch Ratings says in a special report published today that most outstanding ratings of non-Japan Asia structured finance (SF) transactions will be stable in 2011. So far, the key performance indicators such as delinquencies, payment rates and default rates (for ABS and RMBS) and debt service coverage ratios (for CMBS) have been in line with Fitch's expectations. The four economies covered in the report, namely Korea, Singapore, Taiwan and Thailand, are expected to steadily expand with a GDP growth rate of at least 3.7% yoy and a low unemployment rate of below 5% in 2011.
"In 2010, Fitch affirmed the ratings on more than 90% of the outstanding Fitch-rated notes in non-Japan Asia with Stable Outlooks. With stable economic conditions and low unemployment rates, Fitch expects the underlying collaterals to continue to perform well in 2011," says April Chen, Associate Director in Fitch's non-Japan Asia SF team.
Fitch currently monitors the performance of 12 public Korean RMBS, credit card and auto loan ABS transactions. Overall, delinquencies and losses of the underlying collateral pools are well managed and have fallen to levels seen before the 2008 financial crisis. The agency expects this trend to continue in 2011, considering originators' prudent underwriting policies and sound collection track records of these outstanding transactions.
Fitch expects the Singapore property market to continue to recover in 2011. Retail and hotel sectors have demonstrated improving asset performances, and are expected to attract more tourists and commercial activities in 2011. Occupancy rates and rental levels for the office sector have seen a gradual rebound since 2008. Fitch expects the cash flow earned on Singapore properties to strengthen in 2011.
Fitch also covers the asset performance of and rating Outlooks on SF transactions in Taiwan and Thailand, and non-Japan Asia CDOs in the special report. Details of the individual sector outlooks can be found in the report.