Accounting errors have been popping up in a number of European nonconforming deals, with the latest example, Platform Funding Limited, experiencing an upgrade of five tranches from its Leek Finance Plc RMBS after the errors were corrected. Fitch Ratings last week also affirmed 31 tranches of five of the Leek Finance Plc series transactions despite the changes made to cumulative sales and losses in Leek 10, 11, 12 and 14 in the latest reporting period.
The credit enhancement and arrears remain in line with Fitch expectations. Analysts said that the errors noted across the Leek 10, 11 12 and 14 transactions have been rectified this quarter and, as a result, both the cumulative number of properties sold and the cumulative realized losses have experienced an increase this quarter. In some cases there was a substantial increase in the principal balance of properties sold but the resulting impact on losses was not material, Fitch analysts said.