Bangkok--16 Apr--Fitch Ratings
Fitch Ratings has today said that a total of 25 APAC tranches (including public, private, international and national ratings) were downgraded during the first quarter of 2010, and 24 were upgraded. Additionally, 226 tranches were affirmed, accounting for nearly 20% of all outstanding tranches rated by Fitch in the region.
"The main drivers behind the highest upgrade to downgrade ratio for two years, were fewer downgrades to Japanese CMBS plus special servicing activities combined with properties selling faster than in the previous 12-18 months in Australian RMBS" said Alison Ho, Senior Director and Head of Performance Analytics within Fitch's Asia Pacific Structured Finance team. "Most of the downgrades were to junior classes of Japanese CMBS which were downgraded to 'CCC' or below, as losses look increasingly likely, while special servicing and an improvement in the general property market played a role in improving the asset performance of two Australian nonconforming RMBS transactions," adds Ms. Ho.
In contrast to recent quarters, the downgrades were spread across the Asia Pacific regions and across all sectors. Three credit-linked Japanese ABS, two Singaporean ABCP tranches plus one Australian non-conforming RMBS tranche were downgraded in Q110 along with eight Japanese CMBS trust beneficiary interests (TBIs). Four publicly rated CDO tranches were downgraded to D during the quarter following the receipt of valuation notices confirming losses.
Seven of the upgrades in the quarter related to two Australian non-conforming RMBS and one Australian ABS transaction, although it should be noted, that five of the eight tranches upgraded form these three transactions are still rated below 'BBB'. One class of Japanese CMBS TBIs was upgraded following the prepayment of one loan, which Fitch had previously assumed would default due to its high loan to value ratio. Half of the upgrades during the quarter were to privately rated Indian transactions.
The number of Japanese CMBS tranches currently on Rating Watch Negative (RWN) dropped to 22 at end March 2010, and to 14 by mid-April 2010, from 25 at end-December 2009. As at end-Q110, Japanese CMBS accounted for almost half of the Asia Pacific SF ratings with Negative Outlooks, although the overall number dropped slightly from the previous quarter. The bulk of the remainder are on junior classes from Australian prime RMBS.
Individual press releases relating to specific rating actions can be found on Fitch's website at www.fitchratings.com.
Contact: Alison Ho, Hong Kong, +852 2263 9937; Ben McCarthy, Sydney, +612 8256 0388.
Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215, Email:
[email protected].
Additional information is available at www.fitchratings.com.