Fitch Ratings said that EMEA RMBS performance was stable during 1Q10, although the rating agency still has concerns about the poor performance of selected RMBS offerings.
Loans in arrears by three or more months have been stable for the last two quarters, with the exception of U.K. prime and Irish RMBS that continue to deteriorate, according to Fitch.
Prepayment rates for EMEA RMBS, however, have continued to decrease as European mortgage lenders still offer existing borrowers minimal incentive to refinance, the firm said.
Fitch downgraded 68 and upgraded 10 tranches across EMEA RMBs during 1Q10. The downgrades were related to U.K. nonconforming and Spanish RMBS. The credit rating agency also downgraded all senior bonds in Greek RMBS after its April 9 downgrade of Greece’s sovereign rating to triple-B/outlook negative, according to the agency.
"Although EMEA RMBS performance in general has seen improvements, the overall picture masks the poor performance of selected deals," said Peter Dossett, a director in Fitch's EMEA RMBS surveillance team. "Fitch remains concerned that the weak macro-economic environment has not yet fully impacted borrowers and that a further deterioration in performance could occur."