Irish prime RMBS performance continues to improve
The Irish prime residential mortgagebacked securities (RMBS) market continued to improve in the three-month period ended July, according to the latest indices published by Moody’s Investors Service.
Arrears levels have decreased at both early and late stages on both a quarterly and annual basis. The 90+ delinquencies decreased to 15.77% of the outstanding balance in July, from 16.71% in April. The 360+ delinquencies (used as a proxy for defaults) decreased to 11.42% from 12.06% over the same period. The 30+ day delinquencies decreased to 17.89% in July, from 18.86% in April and 21.87% in July 2014.
However, the Irish RMBS market still displays higher delinquency ratios than its European peers.
the housing market, robust employment trends and gradual restoration of consumer confidence will lead to a further measured reduction in arrears.
Nonetheless, the significant decrease in arrears displayed in the Irish RMBS market during the last periods might be driven, not exclusively because of the improving economic environment but by the increased use of restructurings.
Outstanding repossessions remained stable at 0.38%, and cumulative losses rose to 0.16% in July from 0.14% in April. Over the same period, the constant prepayment rate decreased to 1.38% from 1.48% and total redemption rate decreased to 5.41% from 5.53%.
Moody’s said its outlook for Irish RMBS remains stable.
As of July, 34 Moody’s-rated Irish Prime RMBS transactions had an outstanding pool balance of EUR 31.65 bln compared with EUR 34.29 bln in July 2014, constituting a year-on-year decrease of 7.7%.