Despite Standard & Poor's Corp. announcement that it would evaluate the credit quality of the collateral backing RMBS insured by G.E. Mortgage Insurance, following its announcement that the insurer would no longer maintain a triple-A rating, downgrades are seen as unlikely, sources believe. The reasoning being that the risk of a downgrade is easily mitigated by the issuer, and precedent has shown this to be the case, should a downgrade be imminent.

As S&P notes in its release, most U.S. RMBS transactions insured by G.E. Mortgage Insurance Corp. are sufficiently seasoned, from seven to 17 years, and thus the loan-to-value ratios for the pools are below 60%. Australian MBS transactions insured by unit GEMI, which have gained investor favor over the

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.