The era of broad negative mortgage-backed securities ratings from Fitch Ratings is over. Sans a "few pockets of weakness," RMBS and CMBS downgrades will diminish significantly, the agency said this week.
Despite persistently high unemployment levels and projections of a slow economic recovery, Fitch expects downgrades to be more incremental in nature, seen by notches and not rating categories.
Fitch projects prime RMBS and most CMBS to be among the categories that demonstrate strong performance, even if economic trends deteriorate modestly.
"New transactions issued over the next 12 months across all of structured finance will be more conservatively structured and demonstrate superior performance compared to past vintages," says Kevin Duignan, group managing director and head of U.S. structured finance for Fitch.
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2 comments:
I'm still waiting for one of the agencies to drop the US rating while at the same time giving an ailing bank/financial firm a "AAA" rating based on historical governemnt assistance from the US Gov't..
You have to hand it to Fitch; even though ratings were dropped on super-senior AAAs by S&P and Moodys in super-shitty deals, Fitch refuses to do more than re-downgrade AJs they downgraded in 2009. As a result, you have deals like BACM 2007-4 where the AM is still AAA even though the AJ is single B. It's just nonsense, plus they have the nerve to charge for it!
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