Fitch: APAC SF Ratings Mostly Stable in 2Q16; 10 Downgrades, 6 Upgrades
All of the downgrades were to Australian prime RMBS transactions that face concentration issues as the note balances reduce in size.
The Class E notes from Flexi ABS Trust 2013-1 were placed on RWN in April 2016. This was as a result of disputed payments between the originator and one of the main vendors in the programme. The RWN was maintained in July 2016.
The upgrades in 2Q16 were to four notes from the Australian prime residential mortgage-backed securities (RMBS) transactions, one SC transaction and one Chinese asset-backed securities (ABS) note. The RMBS and ABS transactions all benefit from strong asset performance and increased credit enhancement. The underlying collateral issuer in the SC transaction was upgraded, resulting in a similar rating action on the SC note.
Of the affirmations, 82 were RMBS backed by Australian or New Zealand properties and most of the rest (26) came from Australian or New Zealand ABS. Elsewhere, ABS ratings from Thailand (1), India (5), Singapore (5) and China (1) were affirmed together with CMBS ratings from Thailand (5, national ratings) and RMBS ratings from Japan (6).
At the end of 2Q16, most long-term ratings in APAC had Stable Outlooks. The exceptions were one Positive Outlook on a SC rating and the RWN on the Class E notes from Flexi ABS Trust 2013-1.
Asset performance in Australia, the largest contributor to APAC SF rating movements, remained strong in the second quarter, with continuing strong property prices and low interest rates.
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