European Corporate Securitization Market Subdued but Stable
New issuance in the European corporate securitization market remains subdued, according to Standard & Poors, “but we are continuing to receive enquiries for market value structures and assessments of real estate finance for a number of sectors.”
In a new Industry Report Card, S&P says transaction performance across the asset class is relatively stable.
European corporate securitization transactions continue to perform in line with our expectations, with roughly the same number of upgrades as downgrades of Standard & Poor’s underlying ratings (SPURs) over the past six months. Despite the difficult trading conditions predicted for the year ahead, we expect underlying asset performance to remain within our base-case estimates.
In the six months since Standard & Poor’s Ratings Services’ last industry report card, there have been a number of key developments in the European corporate securitization universe. “We have seen rating activity across all sectors, prompted by rating actions on monoline insurers. Industries under the spotlight include the public house sector, where the effect of the first winter under the U.K. smoking ban so far appears minimal, and the social housing sector, where recently announced U.K. government policy changes will take effect in 2009. In insurance securitization, issuance reached record levels in 2007—although these transactions closed before October. The opposite was true for the health care sector, where post-acquisition redemptions continued.”
While underlying ratings have generally been stable over the past six months, this has not been the case for ratings guaranteed by monoline insurers active in the European corporate securitization space, S&P says. A number of rating actions affecting monolines such as Ambac Assurance Corp., CIFG Europe, Financial Guaranty Insurance Co., MBIA Insurance Corp., and XL Capital Assurance Inc. have led to rating activity for the corporate securitizations.
Further details are available in S&P’s Industry Report Card: European Corporate Securitizations Enjoy Stable Underlying Performance Despite Market Slowdown.
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