Ir­ish prime RMBS per­for­mance con­tin­ues to im­prove

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

Con­tin­ued sta­bil­i­sa­tion


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%.

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