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Structured Finance

Global Home > Structured Finance
2019 Outlook

Stable Outlooks for China Structured Finance but Household Debt Growing

Our stable sector outlook reflects slowing (yet ongoing) economic growth coupled with stringent underwriting standards maintained by banks and auto finance companies in housing loans and auto loans, respectively.

Experience Credit Outlooks 2019

Our annual Credit Outlooks are now available. We're producing reports, video, webinars, and commentary across all sectors and regions to give you in-depth insight into credit in 2019 and beyond.

2019 outlooks

Fitch 2019 Outlook: EMEA Structured Finance

Fitch Ratings has a stable asset performance outlook for almost all sectors and countries within EMEA Structured Finance (SF). As quantitative easing ends in Europe, borrow ing costs should increase f or both consumers and corporates, although we expect f avourable economic conditions in most countries to continue in 2019.

2019 outlooks

Outlook for Japanese Structured Finance Remains Stable

The Outlooks on Fitch's ratings for seven auto ABS transactions are Stable, reflecting the steady performance of the underlying auto loans, sufficient credit enhancements and available excess spreads.

9M18 Chinese Securitisation Issuance Exceeds CNY1 Trillion

The China Interbank Bond Market (CIBM) witnessed issuance of CNY678 billion as at October 2018, while the China Stock Exchange Market (CSEM) saw issuance of CNY648 billion.

Australian & New Zealand Structured Ratings Stable Despite Falling House Prices

Our view remains unchanged from last year, as the sector continues to be supported by the robust economies of Australia and New Zealand which have strong macroeconomic fundamentals including low unemployment, steady economic growth and population growth.

Fitch Ratings Marks APAC Milestone with China Onshore Rating Agency

Fitch Ratings has expanded its Asia-Pacific operations with the official office opening today of Fitch (China) Bohua Credit Ratings Ltd. Established in Beijing, the domestic rating agency plans to service China's onshore bond market, complementing Fitch Ratings' international ratings business.

Fitch Ratings Launches China Local Ratings Agency with Danny Chen as CEO

Fitch Ratings announced the launch of Fitch (China) Bohua Credit Ratings Ltd. (Fitch Bohua) which plans to serve China's onshore bond market, and has appointed Danny Chen as Fitch Bohua's chief executive officer. Set up in July 2018 in Beijing, Fitch Bohua is a 100% subsidiary of Fitch Ratings. The company is seeking regulatory approval to cover the financial institutions sector (including banks, non-bank financial institutions and insurers) as well as the structured finance sector in its initial phase of operations.

More Unsolicited SF Comments are Likely due to Late-Cycle Behavior

Late-cycle credit behaviour is manifesting in securitisations more frequently of late, which has triggered more unsolicited commentaries from Fitch Ratings on structured finance deals not rated by the agency and in certain sectors, according to the rating agency in a new report.

September Quake Has Limited Impact on Japanese CMBS Transactions

A 6.7 magnitude earthquake that hit the south of Hokkaido in early September is likely to temporarily stress the performance of some properties underlying Japanese commercial mortgage backed securities (CMBS) rated by Fitch Ratings. However, we do not expect the transactions' ratings to be affected, given their small exposure to properties in Hokkaido prefecture and robust transaction structures.

Continued Growth for China Securitisation Markets

The total issuance of bonds from securitisations in China's two main trading markets is on track to rise beyond 2017 volumes after increasing in 1H18 from a year earlier. The 1H18 issuance in the China Interbank Bond Market (CIBM) and the China Stock Exchange Markets (CSEM) was equivalent to 46% of the full-year amount in 2017 and issuance in the second half of the year is typically higher than the first. 

Euribor Deadline Uncertainty for SF, Covered Bonds, Banks

The approaching deadline for Euribor to become compliant with the EU Benchmark Regulation (BMR) is creating significant uncertainty for the euro-denominated floating rate assets and liabilities of structured finance transactions, covered bonds and banks.

Rating Action

Fitch Rates JD.com's Beijing Jingdong ABS Notes

Fitch Ratings has assigned a final rating to Beijing Jingdong Century Trade Co., Ltd. 2018 Asset-Backed Notes Series 1's (JD ABN 2018-1) fixed-rate class A notes. The notes are backed by a pool of unsecured consumer credit receivables (Baitiao) originated by Beijing Jingdong Century Trade Co., Ltd. (Jingdong Century), a Chinese e-commerce company. This is Fitch's first assignment of ratings for a securitisation of unsecured consumer receivables generated on an online platform in China. Listen to the Teleconference Replay.

Jobs, Origination Key for European Unsecured Consumer ABS

Unemployment is the primary cause of obligor defaults in European unsecured consumer ABS transactions, but secondary factors such as origination channels and purpose can cause significant variations in performance among lenders.

Structured Finance Virtual Investor Series

Newly Released: Covered Bonds

Our Structured Finance Virtual Investor Meeting series gives you the same insights and perspective you’d get at one of our in-person meetings.

Featured Video: 2018 Virtual Investor Series – Covered Bonds

Structured Finance Exposure Draft

This teleconference followed the publication of Fitch’s Exposure Draft for Structured Finance and Covered Bonds Counterparty Rating Criteria. The Exposure Draft changes concentrate around the analysis of commingling risk, remedial periods for account banks, and the case-by-case analysis for payment interruption risk as well as the qualified investments definition.

Italian House Prices Remain at Trough

Italian home prices have been stable at their trough, 17.1% down from the 2008 peak, for eight quarters in a row, even though the number of property trades has been increasing (8% yoy in 2017). 

Structured Finance Faces LIBOR Coordination Risk

Stronger provisions in transaction documentation ahead of LIBOR's discontinuation are an important step to limit the number of legacy structured finance contracts. However, much still needs to be done before the end of 2021 when forced LIBOR panel participation will end. 

Stable Australian Mortgage Performance Despite Seasonal Arrears Increase

Australia's 30+ day mortgage arrears increased by 12bp to 1.13% in 1Q18 from the previous quarter, which is consistent with the seasonal increase in spending during the end-of-year holiday period. 

Southern Europe NPL Reduction SF Implications to Be Seen

Over the past six years, many countries have implemented significant reforms aimed at resolving NPLs, including the removal of structural impediments to portfolio sales, updating insolvency and judicial frameworks aimed at speeding court rulings and increasing out-of-court resolutions.

Senior US CLO Notes Resilient Under LevLoan Stresses

Loosening loan documentation, rising senior leverage and other late-cycle changes in leveraged loan credit dynamics suggest recoveries could come under greater stress in the next downturn, but we expect senior CLO ratings to withstand this pressure under three stress scenarios of differing severity. 

Milken Institute 2018 Global Conference

Milken Institute 2018 Global Conference - De-Risking Emerging Markets Investments

Jeremy Carter, Chief Credit Officer, joins panelists at the 2018 Milken Institute Global Conference to discuss the de-risking of emerging markets. ​

Australia's 'AAAsf' RMBS Ratings Resilient under Stress Test

Our stress test of Australian residential mortgage-backed securities (RMBS) shows the resilience of 'AAA' ratings, even during an Irish-like stress.

APAC Covered Bonds' Long Wait for EU Directive Decision; Uncertainty Lingers

Fitch Ratings believes the long lead time for a decision - and lack of clarity around - treatment of "third countries" under the European Commission's (EC) draft covered bond directive and proposed EU capital requirement regulation, may create uncertainty for the recognition of Asia-Pacific (APAC) covered bonds.

German Court Ruling Underscores Risk to Diesel Car Prices

This week's German court ruling that cities can impose restrictions on diesel vehicles sets the stage for diesel car bans, which will keep pressure on demand and prices. We believe Fitch-rated German auto ABS deals would prove resilient in the face of sharp car price declines, but we will continue to monitor the market to assess whether we need to adjust our asset performance assumptions. 

What to Watch for 2018

Outlooks compendium for Global Autos and related outlook

Dutch Property Sales at Record High

Dutch home prices increased 7.6% in 2017. Apartments have increased significantly in price, rising faster than any other property type. Apartments have outperformed the market for each quarter since 2Q15. 

ABCP Scorecard

The ABCP Scorecard features snapshots for each of the ABCP programmes rated by Fitch globally.

Contacts

Marjan van der Weijden

Global

Marjan van der Weijden

Analytical Group Head

+1 212 612 7850

Doug Murray

Global

Doug Murray

Business Group Head

+1 212 908 0518

Ben McCarthy

APAC

Ben McCarthy

Analytical

+61 2 8256 0388

Sing Chan Ng

APAC

Sing Chan Ng

Business

+65 6796 7210

Susanne Matern

EMEA

Susanne Matern

Regional Group Head

+49 69 768076 237

Beatrice Mezza

EMEA

Beatrice Mezza

Business

+44 20 3530 1273

Gregory Kabance

LATAM

Gregory Kabance

Analytical

+1 312 368 2052

Samuel Fox

LATAM

Samuel Fox

Business

+1 312 606 2307

Rui Pereira

North America

Rui Pereira

Regional Group Head

+1 212 908 0766