OREANDA-NEWS. Fitch Ratings says 210 Asia-Pacific (APAC) structured finance (SF) tranches were affirmed in 4Q15. One rating was upgraded and two were downgraded during the quarter. Six of the ratings that were affirmed during the quarter were simultaneously withdrawn as an Australian RMBS warehouse was restructured.

The upgrade was to the class D notes of L-MAP One Funding Limited and reflected growth in credit enhancement.

The downgraded notes were from Interstar Millennium Series 2005-3E Trust (Class A2, AB) where remedial action following the downgrade of the currency swap provider, The Royal Bank of Scotland PLC (BBB+/Stable/F2) was not in line with current Fitch criteria.

Of the affirmations, 97 were prime RMBS backed by Australian properties (six of which were simultaneously withdrawn), 91 were Australian auto ABS, 10 were CMBS backed by Japanese properties, 6 were RMBS backed by loans in Japan. The remaining affirmations were to ABS ratings from Korea (3) and India (3).

The strong asset performance in Australia and New Zealand reflected the local economic environment. Housing markets in both countries remained strong and property price appreciation has been significant over the past couple of years. Stable interest rates have also helped to reduce volatility in mortgage performance.

In December 2015, an account bank for eight Japanese SF transactions was downgraded. Under Fitch's SF counterparty criteria, account banks rated below 'A' and 'F1' are deemed ineligible to support notes rated 'AAAsf'. The 'AAAsf' notes from the affected transactions are therefore at risk of downgrade, unless remedial action is taken in a timely manner. Fitch understands that the process of replacing the downgraded account bank with an eligible counterparty is underway.

Most long-term ratings in APAC have Stable Outlooks. The exceptions are Positive Outlooks on three Australian ABS tranches and one structured credit rating.