Fitch Ratings has taken positive rating action on 150 tranches of 113 structured finance transactions that are capped relative to the sovereign ratings of Ireland, Portugal and Spain.

The rating actions come after Fitch revised its caps on structured finance ratings to align them with the country ceilings of those countries, which is six notches above the respective sovereign issuer default ratings.

Previously, the rating cap on structured finance transactions for each of these countries was set at just five notches above the issuer default rating of the sovereign.

The tranches identified for potential upgrade are presently rated at the cap and have seen sound asset performance. Fitch will assess whether they have sufficient credit enhancement to warrant a one-notch upgrade from their current ratings.

Selected RMBS tranches that are currently rated at the respective sovereign caps have been placed under review for possible upgrades. The asset-backed and structured credit tranches that were rated at the respective sovereign caps have already been upgraded one notch to the country ceilings.

Also, Fitch has revised its outlook on Portuguese asset-backed and structured credit transactions, to ‘positive,” after revising its outlook on that country’s ‘BB+’ sovereign issuer default rating to ‘positive.’


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