Fitch: South African Structured Finance Showed First Downgrade in Q209
Fitch Ratings-London/Johannesburg-06 July 2009: Fitch Ratings says in a new report that the Fitch-rated South African structured finance universe experienced its first note downgrade in Q209.
During Q209, Fitch formally reviewed the performance of nine structured finance transactions. As a result, the agency initiated one rating downgrade relating to an RMBS transaction, and revised the rating Outlooks to Negative from Positive on seven tranches of notes with respect to three separate RMBS transactions.
The rating downgrade affected one speculative-grade note of the Ikhaya 2 RMBS transaction. The note was downgraded because the three-month plus arrears in the transaction are high and the trend appears to be increasing.
With respect to the Outlook revisions, the agency's concern also surrounded the increasing trend in three-month-plus arrears with respect to these transactions, although, apart from the tranche that was downgraded, Fitch sees no immediate reason for further rating action at this time.
The effects of the global economic slowdown continued to be felt during Q209 in South Africa, and further effects are expected to be felt in the coming months, which increases the likelihood of rating actions during 2009. However, South African ratings in respect of securitisation transactions overall remain stable
The report, entitled 'Fitch Ratings South African Structured Finance Q2 2009 Transition Study', is available on the agency's public website, www.fitchratings.com, under the following headers: Structured Finance >> Structured Credit >> Performance Reports.
Contacts: Joshua Cohen, Johannesburg, Tel: +27 11 380 0907; Alfons Ideler, +27 11 380 0901; Andy Brewer, London, Tel: +44 (0) 20 7417 3481.
Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email: julian.dennison@fitchratings.com.
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