Despite a much weakened property market, residential mortgage-backed securitizations in Hong Kong have performed very well to date, concluded Moody's Investors Service and Standard & Poor's in separate reports.

All MBS deals rated by both agencies have outperformed the industry average, despite the stresses on the economy over the past two years. These have included a record high unemployment rate, most recently at 6.3%, and a slump in residential property prices 41% down on their 1997 peak. "No default has ever occurred on a mortgage included in a Hong Kong RMBS rated by S&P, and delinquency rates have stayed very low," said S&P in its report.

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