| Abstract: | Looking ahead into 2008, we consider that there is an increasing risk that collateral performance in a number of European structured finance asset classes will worsen. The recent period of low loss rates could not last indefinitely, and current capital market disruption could now act as a catalyst for some deterioration. It remains to be seen whether collateral risks will rise sufficiently to turn the overall European structured finance rating performance onto a more negative path, or whether we will simply see a moderation in the number of upgrades, especially in European residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS). In our opinion, collateral performance issues over 2008 are most likely to affect speculative-grade or low investment-grade ratings, with
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| Sector: | Asset-Backed Commercial Paper, Asset-Backed Securities, Collateralized Debt Obligations, Commercial MBS, Corporations, Financial Institutions, Global Issuers, Insurance, International Public Finance, Public Finance, Real Estate Companies, Residential MBS, Servicer Evaluations, Sovereigns, Structured Finance, Utilities
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