Fitch Releases 2005 U.S. Structured Finance Rating Transition Study.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 -- 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. has released a new study focusing on the 2005 and long term rating migration performance of Fitch-rated U.S. structured finance securities. The report includes transition data and analysis for each of the major structured finance sectors, including the asset-backed (ABS), residential mortgage-backed (RMBS RMBS Residential Mortgage-Backed Securities RMBS Rambus, Inc. (NASDAQ stock symbol) RMBS Russian Mortgage-Backed Securities ), commercial mortgage-backed (CMBS CMBS See: Commercial Mortgage Backed Securities ) and collateralized debt obligation Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, (CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the ) sectors. Notwithstanding high energy costs and rising interest rates, the U.S. economy continued to perform surprisingly well in 2005, with robust real gross domestic product growth, a further decline in the domestic unemployment rate and sustained strength in both corporate and consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. . 'Against this backdrop, underlying structured finance collateral - both consumer and corporate - generally also delivered solid results and continued to support an environment of more upgrades than downgrades in structured finance,' said Stephanie Mah, Senior Director, Credit Market Research, Fitch Ratings. Fitch's U.S. structured finance ratings exhibited an upgrade-to-downgrade ratio of 3.1 to one in 2005, compared with 2.6 to one in 2004. Overall, 10% of Fitch-rated U.S. structured finance securities experienced upgrades in 2005, while just 3% experienced downgrades. Rating activity was particularly strong in the CMBS sector, where upgrades towered over downgrades across nearly every Fitch rating grade. Positive rating activity was also prevalent in the RMBS sector in 2005, but the pace of upgrades slowed relative to 2004. Nonetheless, RMBS rating actions were firmly net positive with upgrades affecting 13% of RMBS ratings and downgrades just 2%. The ABS and CDO sectors also saw meaningful increases in positive rating activity, with the CDO sector, in particular, posting a downgrade-to-upgrade ratio of 0.7 to one in 2005, reversing previous years' trend of net rating deterioration. Over the full 15-year study period (1991 - 2005), the performance of Fitch-rated U.S. structured finance securities was robust with at least 96% of investment grade rated securities, in particular, either maintaining their rating or experiencing upgrades over an average year. 'Rating stability was especially pronounced at the 'AAA' level with an average of 99.2% of Fitch-rated 'AAA' securities maintaining their rating year over year,' said Mariarosa Verde, Managing Director, Credit Market Research, Fitch Ratings. The average annual frequency of a Fitch-rated structured finance security maintaining its rating or experiencing an upgrade over this historical period was consistently high across each of the major asset classes - ABS, RMBS, CMBS and CDOs - and remained high over multiple-year horizons. The new study is titled 'Fitch Ratings 1991-2005 U.S. Structured Finance Transition Study' and is available under the Credit Market Research section of the Fitch Ratings web site at 'www.fitchratings.com'. 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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