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July 8 (The following statement was released by the rating agency)
Fitch Ratings says that structured finance (SF) transactions in Australia remained stable in 2Q14 as 82 tranches from 32 transactions were either affirmed or upgraded as a result of continued good asset performance. No New Zealand transaction was subject to a rating action during the quarter.
Asset performance remained strong overall, reflecting the robust economic performance and the rebound in the Australian housing market. Stable interest rates in Australia since September 2013 have also helped to reduce volatility in mortgage performance.
Prime RMBS notes accounted for most of the affirmations (49), followed by unsecured consumer ABS (8), reverse mortgage RMBS (6), equipment lease ABS (5), non-conforming RMBS (4), non-conforming auto ABS (3), auto ABS (1) and small balance CMBS (1). Fitch upgraded classes B and C of the unsecured consumer ABS transaction, Flexi ABS Trust 2013-2 in 1Q14, reflecting the strong build-up of credit enhancement due to fast amortisation and lower losses than expected. Three tranches from two Australian prime RMBS were upgraded (Liberty PRIME Series 2010-1 and National RMBS Trust 2011-2) reflecting increased credit enhancement, stable asset performance, and strong excess income flows.
The 32 transactions reviewed during the quarter represented approximately 17% of the 190 Fitch publicly rated Australia and New Zealand SF transactions outstanding at end-2Q14.
The Outlooks on most SF ratings in Australia and New Zealand remained Stable. Outlooks on three prime RMBS were revised to Positive from Stable during 2Q14, bringing the total number of Australian tranches with Positive Outlooks to five as two auto ABS tranches also have Positive Outlooks.
Individual rating action commentaries relating to specific rating actions can be found on Fitch's website at www.fitchratings.com.