RPT-Correction: Fitch affirms Hypolan NV/SA Comp Hyla-1
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July 8 (Reuters) - (The following statement was released by the rating agency)
This announcement corrects the version published on 05 July 2013 to clarify the sellers' ownership structure.
Fitch Ratings has affirmed Hypolan NV/SA Comp Hyla-1 (Hypolan) class A notes, as follows:
Class A (ISIN BE0002386580) affirmed at 'AAAsf'; Outlook Stable
The transaction consists of prime Belgian residential mortgage loans originated by Caisse De Depot et de Credit Agricole SCRL (AGRICAISSE) and Deposito En Kredietkas van de Landbouw CVBA (LANBOKAS). Both entities, together with Crelan SA, form a federation with solidarity for all engagements between its members. Credit Agricole SA (CASA'A+'/Stable/'F1+'), is a major shareholder of LBK/CA, hence the majority control over the Crelan Federation is held directly or indirectly by one or several entities of the CASA Group.
KEY RATING DRIVERS
Stable Arrears Performance
The affirmation reflects the stable performance of the securitised loans over the past year. Arrears have been gradually increasing but remain low. As of the May 2013 payment date, the volume of loans in arrears by more than three months stood at 1.2% of the current pool balance, up from 1.0% a year ago.
Full Provisioning of Defaulted Loans
The transaction's structure allows for the full provisioning of defaulted loans (defined as loans that have been identified as such by the servicer). As of the May 2013 interest payment date, the cumulative gross defaults stood at 0.6% of the initial pool balance and cumulative recoveries received from defaulted loans stood at 61.6% of the total defaulted balance. To date, the levels of gross annualised excess spread, standing at 0.65% of the outstanding collateral balance, together with period recoveries have enabled the issuer to comfortably clear defaults without requiring a draw on the reserve fund.
Increased Counterparty Risk Mitigated:
Belfius Bank, which acts as the interest swap counterparty, was downgraded to 'A-'/'Stable'/''F1' from 'A-'/'Stable'/'F1' in January 2012. To mitigate the increased counterparty risk, the swap provider opened a swap collateral account with the account bank ING Bank N.V. ('A+'/'Stable'/'F1+'). The May 2013 investor report showed that no collateral was being posted as the mark-to-market value of the swap was in favour of the swap counterparty.
Deterioration in asset performance may result from economic factors, in particular the increasing effect of unemployment. A corresponding increase in new defaults and associated pressure on excess spread levels and the reserve fund could result in negative rating action particularly at the lower end of the capital structure.
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