(The following statement was released by the rating agency)
Feb 11 - Fitch Ratings says Outlook revisions to Negative for
the Dutch sovereign and the state-supported mortgage insurance entity Stichting
Waarborgfonds Eigen Woningen (WEW) will not impact the ratings of Dutch RMBS.
The Outlooks on the Netherlands' ( 'AAA'/'F1+') ratings were revised to Negative
from Stable on 5 February 2013. The Outlook on WEW ( 'AAA'/'F1+'), a fully
state-supported entity provides mortgage insurance through the National Mortgage
Guarantee (NHG) scheme to a large number of loans in several RMBS pools, was
revised to Negative from Stable on 8 February 2013 since WEW's ratings mirrors
that of the sovereign.
Fitch currently gives full credit in its ratings analysis for NHG backed
mortgages to the pay-out from NHG's guarantee, given WEW's high rating and state
support. Adjustments are however made to reflect the risk of claim rejections
due to operational issues (e.g. defective documentation) and a discrepancy
between the guarantee cover amount and the mortgage loan amount.
The agency believes that the credit to the NHG guarantee in a 'AAAsf' rating
scenario remains appropriate after the Outlook revision to WEW's ratings, given
the strategic nature of the NHG guarantee in fulfilling the Dutch government's
objective of promoting access to home ownership for lower and middle income
The possibility of the state reducing or reneging on its commitment to support
the WEW or NHG scheme currently remains extremely remote in Fitch's view. As a
result, the agency believes in the case of a downgrade of the Dutch sovereign
below 'AA'/'F1+' such willingness and ability to support the NHG scheme could
gradually diminish as the government will be faced with increasingly difficult
policy choices on the use of state funds. The agency believes, given the
important status of the NHG guarantee in the market, such changes are more
likely to come incrementally through increasing the premium for an NHG guarantee
and closer scrutiny of claims which might lead to an increase in rejection
Fitch will publish a more detailed commentary shortly about the sensitivity of
Dutch RMBS ratings to a downgrade of the Dutch sovereign below 'AA'/'F1+',
focussing its analysis on transactions with a large portion of NHG guaranteed
ING Bank NV ('A+/'F1+'), ABN AMRO Bank NV ('A+/'F1+') and Bank Nederlandse
Gemeenten's ('AAA'/'F1+') Outlooks were also revised to Negative on 6 February
2013, as these ratings are all based on the expected state support. These banks
act as important counterparties in many Dutch RMBS transactions, often as issuer
account providers and/or swap providers. After this change in Outlook, the
ratings of these banks remain in line with Fitch's counterparty criteria to
support note ratings up to 'AAAsf', therefore the change in these banks'
Outlooks has no impact on RMBS ratings.