UK prime RMBS stable in February, NPLs at 1.1%
The performance of the UK prime residential mortgage-backed securities (RMBS) market remained stable in the three-month period ended February 2015, according to Moody’s Investors Service.
The 90+ day delinquencies decreased to 1.11% in February from 1.50% in November 2014. Outstanding repossessions slightly decreased to 0.06% in February from 0.07% in November 2014 and cumulative losses increased marginally to 0.60% in February from 0.55% in November 2014. Moody’s annualised total redemption rate trend was relatively stable at 17.36% in February.
The rating agency said it expects that the overall collateral quality for new UK RMBS will improve given the favourable economic conditions such as higher GDP growth than in the rest of Europe, low interest rates and lower levels of unemployment than in the rest of Europe. In the UK, it forecasts a GDP growth of around 2.5% in 2015 and 2016.
In March, Moody’s placed the 77 notes on review for upgrade from Arran Residential Mortgages Funding 2010-1 Plc, Arran Residential Mortgages Funding 2011-1 and Arran Residential Mortgages Funding 2011-2 Plc, Greenock Funding No.5 Plc and Granite Master trust.
The rating agency has also assigned new ratings to six transactions in the UK prime RMBS market: Brass No. 4 plc, originated by Accord Mortgages Limited (not rated), issued GBP 1.11 bln; Fosse Master Issuer plc Series 2015 -1, originated by Santander UK (A2/Prime-1), issued GBP 1.0 bln; Lanark Master Issuer plc Series 2014-2, originated by Clydesdale Bank plc (Baa2/Prime-2) and Yorkshire Bank Home Loans Limited (not rated), issued GBP 1.19 bln; Silverstone Master Issuer plc Series 2015 -1, originated by Nationwide Building Society (A2/Prime-1), issued GBP 1.53 bln; Slate No. 1 plc, originated by Bradford & Bingley plc (A1/Prime-1, stable), Legal & General Bank Ltd (not rated), Mortgage Express (not rated) and NRAM plc (C/Prime-1), and sold to the issuer by Consilium Airton Ltd, issued GBP 2.38 bln; and, Slate No. 2 plc, originated by GMAC-RFC Ltd (93.4 % of loans) and Kensington Mortgage Co. (6.6% of loans), and sold to the issuer by Consilium Airton Ltd (not rated), issued GBP 0.41 bln.
Moody’s rates 89 UK prime RMBS transactions with an outstanding pool balance of GBP 139.3 bln.