Bangkok--4 Mar--Moody's
Moody's Investors Service has published its latest sector Outlook for key asset classes in the Asia/Pacific structured finance market. This report, "2009 Outlooks for Asia Pacific (Including Japan) Structured Finance," represents part of Moody's practice -- globally as well as within specific jurisdictions -- of enhancing consistency across ratings groups and the transparency of the ratings process.
In its latest assessment, Moody's says the Outlook for asset/collateral performance for most asset classes in Asia is Negative, and Stable for some -- namely in Japan and Korea. Moreover, the rating implications for most classes are generally stable, although again in various cases, volatility and downward pressure are anticipated.
The asset performance Outlook for Asia Pacific (excluding Japan) Balance Sheet CLOs is Negative. The ratings are expected to be negatively affected by both the revised rating assumptions and the credit deterioration in the asset pool.
In Australia, the asset performance Outlook for ABS and CMBS, as well as prime and non-conforming RMBS, is Negative. But in all cases, the rating implications are stable, due to a variety of factors, such as conservative credit support levels for ABS and sufficient credit enhancement in the case of non-conforming RMBS.
In Japan, the picture is slightly more varied, with Stable asset performance Outlooks for conforming RMBS and ABS backed by auto loans, installment sales loans, or credit cards. Installment sales and credit cards are originated by shimpan companies, which have tightened their lending and merchant screening criteria to cope with recent regulation changes, resulting in stronger obligor profiles.
With regard to RMBS-Conforming and ABS Auto, in the past, obligor performance has long been stable, even during times of stress. All other asset classes have a Negative outlook for underlying asset/collateral performance due mainly to the severe business environment for Japanese corporates (ABS-SME Leases, CDOs) or the weakening real estate market (ABS-Real-Estate Backed SME Loans, CMBS).
In Korea, the asset performance Outlook for ABS is Negative, but no immediate rating pressure is expected for credit card transactions. The Outlook for the RMBS sector is Stable, with the consequent view that rating implications are limited. Further supportive factors for the Korean RMBS market are low LTV ratios and NPLs.
Finally in Singapore, the asset performance outlook for CMBS -- which is split into office, retail, and industrial -- is negative, with limited rating implications, although REIT originators with immediate refinancing requirements may exhibit higher ratings volatility.
For further information, please refer to the report which was released today, as well as the specific regional/asset 2008 Review and 2009 Outlook reports, available on www.moodys.com.
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Tokyo Keiko Sawada Managing Director
Structured Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
New York
Jennifer Elliott
Managing Director
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653