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July 8 (The following statement was released by the rating agency)
Fitch Ratings says 195 Asia-Pacific structured finance (SF) tranches were affirmed in 2Q14; the remaining rating actions were seven upgrades and three downgrades.
Of the total affirmations, 77 were from Australia, which also contributed five of the upgrades during the quarter. Asset performance was supported by continued robust economic performance. The upgrades were made to prime RMBS and unsecured consumer loan ABS, where a build-up of credit enhancement supports the higher ratings.
Two Japanese prime RMBS tranches were upgraded by one notch each. All three downgrades in the region were Japanese CMBS tranches that defaulted and the ratings were simultaneously withdrawn. Fitch's SF team in Tokyo also affirmed seven Japanese prime RMBS tranches, two ABCP programmes, one multi-borrower CMBS tranche and 1 Thai credit card tranche.
A total of 33 publicly rated tranches from non-Japan Asia SF transactions were affirmed in 2Q14 as asset performance continued to be within the agency's expectations. Indian auto loan ABS accounted for most of the quarter's rating actions, at 26. Delinquencies had risen markedly between end-2013 and early 2014, a factor that resulted in the outlooks assigned to four tranches being revised to Negative from Stable during 2Q14; arrears have subsequently stabilised. Elsewhere in the region, five Korean ABS tranches, one Singapore CMBS tranche and one structured credit tranche were affirmed during the quarter.
The Outlook on the latter was revised to Negative from Stable, reflecting a previous rating action on a transaction counterparty.
Stable Outlooks continued to dominate as of 30 June 2014. There were nine Positive Outlooks and six Negative Outlooks.
Individual rating action commentaries relating to specific rating actions can be found on Fitch's website at www.fitchratings.com.