Bangkok--11 Jan--Fitch Ratings
Fitch Ratings has today said that a total of 93 Asia Pacific structured finance or structured credit tranches (including public, private, international and national ratings) were downgraded during the fourth quarter of 2009, while 30 were upgraded. Additionally, 337 tranches were affirmed, accounting for over a quarter of all outstanding tranches rated by Fitch in the region.
"The most significant rating actions in Q409 were the downgrades of over 80 Japanese CMBS classes. These followed the implementation of the Japanese CMBS surveillance criteria in September 2009. Reviews were conducted and rating actions had been taken since the implementation of the criteria and this process continued into Q409," said Helen Wong, Director in the Performance Analytics team of Fitch's Asia Pacific Structured Finance. "A few downgrades were related to New Zealand non-conforming RMBS transactions as a result of deteriorating performance of the underlying portfolios," Ms. Wong added.
Despite these downgrades, the majority of tranches rated in Asia Pacific continue to perform in line with Fitch's expectations, as evidenced by the fact that most rating actions in the quarter were affirmations.
Over 20 publicly rated Australian ABS/RMBS tranches were upgraded due to increases in credit enhancement levels and sufficient excess spreads to cover losses incurred to date. Five publicly rated New Zealand RMBS tranches were also upgraded due to the build-up in credit enhancements. Two tranches from a Hong Kong CMBS transaction were upgraded on account of strong cash flows of the underlying properties and the mitigation of the refinancing risk given financing is already secured by the originator.
Over 20 Japanese CMBS tranches are currently placed on Rating Watch Negative. The agency aims to review these over the coming months, upon the realisation of expected dispositions of the underlying properties of loans which have defaulted or are expected to default, or other events expected to trigger a review.
At the end of December 2009, the number of tranches with Negative Outlooks in Asia Pacific increased to 220 from 193 at the end of Q309. Japanese CMBS accounted for the majority of the Negative Outlooks reflecting Fitch's negative view of the Japanese commercial real estate market and the real estate finance environment.
Individual press releases relating to specific rating actions can be found on Fitch's website at www.fitchratings.com.
For further information on the surveillance criteria and methodology, please see the criteria report, "Criteria for Japanese CMBS Surveillance" and the special report, "Application and Impact of the Japanese CMBS Surveillance Criteria". Both reports were published on 2 September 2009 and are available on the agency's website, www.fitchratings.com. Note that the reports have been published simultaneously and are intended to be read in conjunction with each other. The criteria report describes the approach and framework of the methodology, and the special report details the application and assumptions adopted for the 2009 surveillance review.
Other applicable Criteria available on Fitch's website at www.fitchratings.com: "Global Structured Finance Rating Criteria", dated 30 September 2009.
Contact: Helen Wong, Hong Kong, +852 2263 9934; Alison Ho, Hong Kong, +852 2263 9937; Ben McCarthy, Sydney, +612 8256 0388.
Media Relations: Karen Cho, Hong Kong, Tel: +852 2263 9935, Email:
[email protected]; Shivani Sundralingam, Singapore, Tel: + 65 6796 7215, Email:
[email protected].