RMBS per­for­mance sta­ble in April

Financial Mirror (Cyprus) - - FRONT PAGE -

The per­for­mance of the Greek res­i­den­tial mort­gage-backed se­cu­ri­ties (RMBS) mar­ket was sta­ble dur­ing the three months ended April, ac­cord­ing to the lat­est in­dices pub­lished by Moody’s In­vestors Ser­vice.

The 90+ day delin­quen­cies of Greek RMBS trans­ac­tions rose to 5.6% of the cur­rent bal­ance in April 2014 from 4.3% in April 2013. The in­crease is due mainly to the de­te­ri­o­ra­tion of one sin­gle trans­ac­tion, Es­tia Mort­gage Fi­nance II PLC, which has the high­est pro­por­tion of over­all delin­quen­cies at 11.0% of delin­quen­cies in the cur­rent bal­ance, com­pared with 7.8% in April 2013. Delin­quen­cies and cu­mu­la­tive de­faults in the re­main­ing deals, how­ever, were fairly sta­ble.

In line with the trend, the cu­mu­la­tive de­fault rate of 1.9% for Greek RMBS has re­mained un­changed since Jan­uary. How­ever, com­pared with those of the pre­vi­ous year, cu­mu­la­tive de­faults in­creased from 1.6%.

The range of cu­mu­la­tive de­faults has in­creased to 0.6%-1.8% of the orig­i­nal bal­ance from 0.5%-1.5%, but is still sta­ble de­spite re­sult­ing from spon­sor banks’ re­pur­chas­ing of delin­quent loans. The con­se­quence of these re­pur­chases is the ar­ti­fi­cial sta­bil­i­sa­tion of ar­rears and de­faults lev­els. Es­tia Mort­gage Fi­nance II PLC once again showed a dif­fer­ent trend with cu­mu­la­tive de­faults at 6.6% in April, ow­ing to lower lev­els of re­pur­chases in the trans­ac­tion.

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