Speculation that the Turkish sovereign and local downgrades would affect ABS deals came true last week, when Fitch announced it would lower ratings on four of the structures, including Ottoman Bank's TPR plc, which fell to a BBB-' from a BBB'.

Contrary to past assumptions that the originator, Ottoman Bank, would maintain its strength in face of economic deterioration, Fitch now estimates an increase in the operating risks of the bank, with the sovereign downgrades in the backdrop. Both the country's long-term sovereign and long-term local ratings were lowered one notch to B' and B-' respectively. The agency said in a report that delineates the downgrade that those ratings will maintain a negative outlook, which can continue to adversely affect the banking sector.

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