Standard & Poor’s will lower its credit ratings on all 'AAA' rated Greek securitization tranches to 'AA' based on its view of increased Greek country risk.
The rating agency currently maintains ratings on three Greek ABS securitizations and eight Greek RMBS securitizations.
After assesing Greek country risk and how it might affect the 'AAA' rated tranches of the Greek securitizations it rated, S&P found that the current levels of such risk are no longer commensurate with 'AAA' ratings.
“In our view, the Greek economy will likely grow significantly more slowly over the medium term than we previously expected,” S&P said. “Moreover, we believe that Greece's recession will likely deepen through next year. In our opinion, these country risk factors will likely result in these securitizations having greater cash flow stress.”
Thus far, rating volatility on Greek securitizations has been limited since these deals' creditworthiness has been generally supported by the moderate risk profile of underlying asset pools, conservative structural features, and substantial deleveraging, S&P said.