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The performance of the Greek residential mortgage-backed securities (RMBS) market remained stable in three months ended July, according to the latest indices published by Moody’s.
The 90+ day delinquencies of Greek RMBS transactions rose to 5.9% of the current balance in July from 5.6% in July 2013. The highest proportion of overall delinquencies came from Estia Mortgage Finance II PLC, with 11.1% delinquencies of the current balance in July, an increase from 8.8% in July 2013. For the remaining deals, delinquencies continued to show stable performance.
Cumulative defaults slightly increased to 2% in July from 1.9% in the previous quarter. The cumulative default rate of Estia Mortgage Finance II PLC contributed the highest portion of the overall default index, with defaults at 7.0% of the original balance in July compared with 5.4% in July 2013.
On August 1, Moody’s upgraded Greece’s government bond rating by two notches to Caa1 from Caa3 reflecting the rating agency’s expectation of an improvement in economic outlook, the significant improvement in Greece’s fiscal position over the past year and the government’s reduced interest burden and lengthened maturities of debt. In addition, Moody’s raised Greece’s local- and foreign-currency bond and deposit ceilings to Ba3 from B3 to reflect the country’s reduced economic, legal and political risks.