Bangkok--4 Sep--Fitch Ratings
Fitch Ratings said today that all 14 Negative Outlooks within the Asia Pacific CDO sector, relate to synthetic corporate CDO tranches and junior tranches from Asian CLOs, while Outlooks on senior tranches from bank balance sheet CLOs are Stable.
"The resilient ratings performance of the bank balance sheet CLO sub-sector is attributed to the diverse and granular nature of the underlying asset portfolios", says David Wong, Director in Fitch's Asia Pacific SF team. "Moderate negative ratings migration in a deteriorating corporate environment is mitigated by the surplus credit enhancement levels evident in the senior tranches."
The deteriorating performance of the underlying synthetic corporate CDO portfolios, together with relatively low levels of surplus credit enhancement, means that the agency has a Negative Outlook on a number of tranches in this sub sector.
Stable Outlooks have been assigned to tranches with higher levels of surplus credit enhancement from transactions with low levels of defaults and continued deleveraging.
Full details can be found in the report "Asia Pacific Structured Finance Outlooks - One Year On".
Rating Outlooks have been published for all newly issued APAC SF tranches since June 2008, and concurrently with rating actions for tranches issued prior to June 2008. Unlike a Rating Watch which notifies investors that there is a reasonable probability of a rating change in the short term as a result of a specific event, rating outlooks indicate the likely direction of any rating change over a one- to two-year period.
Contacts: Kate Lin, Hong Kong, +852 2263 9912; David Wong, Hong Kong, +852 2263 9927.
Media Relations: Lisa Lim, Singapore, Tel: +65 6796 7214, Email: [email protected].
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