Bangkok--15 Mar--Moody's
Moody's Investors Service says that performance of mortgage loans in outstanding RMBS originated from Korea, Hong Kong and Taiwan was steady during 4Q2009.
Moreover, with the current situation, there is no downward pressure evident on ratings in all three markets.
Moody's latest analysis appeared in its just-published 4Q2009 report, entitled "Asia ex-Japan RMBS 4Q2009 Performance Review."
For Korea, as of end-2009, its gross default ratio was less than 0.5% of the outstanding pool balance for all transactions, and the recovery rate was over 99%.
"Moody's has a stable outlook on the performance of Korea's mortgage loan receivables. With the current low delinquencies for mortgage loans, the subordination in the transactions is sufficient for the ratings on the relevant notes," says Marie Lam, a Moody's VP/Senior Credit Officer and author of the report.
Meanwhile, in Hong Kong, the performance of mortgage loans in RMBS was very stable. The loans in these transactions are very seasoned and defaults by obligors are unlikely. Delinquency ratios, which reflect 30-119 days past due and as a percentage of the outstanding pool balance, were around 0.1% for all transactions.
In the report, Moody's also discussed the performance of mortgage loans in the two Taiwan cross-border RMBS transactions. Mortgage loans in Hsinchu International Mortgage 2 Limited have higher LTV than Hsinchu International Mortgage 1 Limited. Hence, performances differ substantially in that the transaction with higher LTV exhibits much higher delinquency and default ratios than the one with lower LTV.
"The performance of the high LTV mortgage loans started to stabilize in the last few months. Currently, these two transactions have over 50% subordination as a result of their sequential payment structures. Such subordination provides sufficient protection against the current performance and Moody's sees no rating implications for the transactions," adds Lam.
The report is now available at www.moodys.com.