Fitch: Credit Performance Drops for U.S. Structured Finance.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- The first six months of 2007 have yielded noticeably weaker rating performance for U.S. structured finance compared with the same period last year, with RMBS RMBS Residential Mortgage-Backed Securities RMBS Rambus, Inc. (NASDAQ stock symbol) RMBS Russian Mortgage-Backed Securities experiencing the most dramatic deterioration, according to Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. in its mid-year Credit Action Report. With 1,183 upgrades and 815 downgrades through June 2007 , Fitch's 1.5:1 upgrade/downgrade ratio represents a drop-off from the same period last year, when Fitch reported 1,825 upgrades and 377 downgrades (4.8:1 upgrade/downgrade ratio through June 2006). A major reason for the drop-off in performance, not surprisingly, is the increased downgrade activity in RMBS. Most of the deterioration has emanated from U.S. subprime RMBS, with some spillover spill·o·ver n. 1. The act or an instance of spilling over. 2. An amount or quantity spilled over. 3. A side effect arising from or as if from an unpredicted source: into the Alt-A arena, while prime RMBS is proving to be resilient and performing within expectations. The weak performance of loans issued last year, coupled with the significant rate resets scheduled for this and next year translate to continued weak performance and rating downgrades for the remainder of 2007. Term ABS performance has shown to be resilient amid the mortgage market troubles, though subprime consumer ABS segments such as credit cards and auto loans may be under more pressure later in 2007. While Fitch expects U.S. CMBS CMBS See: Commercial Mortgage Backed Securities rating performance to remain strong for the remainder of the year and delinquencies to continue to decline, loan defaults may begin to increase as transactions issued in recent years contain larger interest-only (IO) concentrations and higher amounts of debt. 'The Structured Finance Credit Action Report: Mid-year 2007' is available on the Fitch Ratings web site at www.fitchratings.com. The report discusses credit trends and provides investors with up-to-date rating activity by Fitch in the U.S. mortgage and non-mortgage ABS market. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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