Bangkok--18 Feb--Fitch Ratings
Fitch Ratings has today said in its special report, "Australian Structured Finance 2009 Outlook", that asset performance across all asset classes will deteriorate over 2009. The ratings Outlook, however, for most asset classes should remain Stable.
"Over 2008, the economy and the underlying assets in structured finance transactions generally performed well. This is set to change in 2009, with Fitch expecting negative GDP growth, increasing unemployment and further falls in property prices, which all leads to deterioration in performance," says Natasha Vojvodic, Senior Director in the agency's Australian Structured Finance team.
The aggressive 400bp cut in interest rates by the Reserve Bank of Australia (RBA) will offset some of the deterioration. However, unemployment and the general economy remain the key elements in how structured finance assets will perform. The Australian government and the RBA have introduced some initiatives over 2008 and the beginning of 2009 to ease the burden of the credit crisis on home buyers and the economy. Counterparty rating actions will also continue to impact the ratings of structured finance assets.
The special report looks at how Fitch expects RMBS - both conforming and non-conforming, CMBS, ABS and ABCP assets and ratings, to perform over 2009. Non-conforming RMBS and CMBS are expected to come under the most rating pressure mainly due to the slowing economy and the rationing of credit by lenders. While the underlying asset performance of conforming RMBS, ABS and ABCP will worsen, the expectation of delinquency and loss levels remaining within rating parameters, as well as transaction structural features, result in a Stable rating Outlook.
The special report will be available shortly from www.fitchratings.com.
Contacts: Natasha Vojvodic, Sydney +61 2 8256 0350/ [email protected]; David Carroll, +61 2 8256 0333/ [email protected].
Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215, Email: [email protected].
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.