The UK, Germany, Spain and Italy all show a declining trend in used car prices this quarter, Fitch Ratings says in its latest index report for auto ABS in Europe. The change is particularly pronounced in the UK, where Brexit uncertainty is weighing heavily on consumer confidence.
The Australian Prudential and Regulation Authority (APRA) in July 2019 announced its final rules on banks' total loss-absorbing capacity, which called on the four major banks to increase their capacity by 3pp of risk-weighted assets by January 2024.
Data released this week by the Society of Indian Automobile Manufacturers showed that total auto production fell by 10.7% yoy in April-July 2019 and passenger vehicles sales dropped by 21.6% yoy.
The performance of Chinese auto ABS and RMBS transactions remained strong in 2Q19, despite the country's increasing household debt, due largely to the tight underwriting standards imposed by regulators, Fitch Ratings says. We continue to maintain the stable outlook for these two sectors.
Auto-ABS issuance reached CNY78.4 billion by end-June 2019, exceeding issuance in the first three quarters of 2018. This was partly led by the continued rise in the auto-finance penetration rate to approximately 50% by end-2018, although it remained significantly lower than that of developed markets.
While both the leveraged loan and U.S. CLO markets are seeing more late cycle behavior emerging, the make-up of the markets themselves has changed quite radically of late, according to Fitch Ratings in its 2019 Virtual Investor Video Series for Structured Finance.
Chinese household debt has continued to rise rapidly, reaching 85% of disposable income at end-2018. Rising servicing costs will weigh on economic growth in the medium term and this is reflected in our latest GDP forecasts.
Over the last few months Fitch has been testing the resilience of our portfolio of post-crisis European CLOs against a credit cycle downturn. Senior analysts from Fitch’s structured credit team discussed the topic and gave an insight into the parameters of our tests and the conclusions in this webinar.
Unemployment is at its lowest level in half a century and wages are still growing. John Bella discusses what this means for core assets like credit cards, prime autos and even student loans in our Virtual Investor Meeting for U.S. ABS.
Chinese household debt has continued to rise rapidly, reaching 85% of disposable income at end-2018. Rising debt servicing costs do not pose near-term risks to financial stability, but will weigh on economic growth in the medium term and this is reflected in our latest GDP forecasts.
Fitch Ratings believes there are opportunities for specific retail and consumer companies to outperform the overall industry, even amidst slowing retail sales and weaker consumer sentiment. Consumers are becoming more selective in their purchases, but are still keen to spend, particularly in lower-tier cities, where income growth is higher.
The property market in Australia has always caught investors’ attention. Chris Stankovski, Senior Director, Structured Finance, Australia, shares his views on the market performance, outlook, and how the regulatory landscape for mortgages has changed in Australia.
Total losses on US and Canadian structured finance (SF) bonds are concentrated in crisis-era transactions (2005-2007 vintages) and primarily consist of losses on US RMBS, Fitch Ratings says in a new report. Losses on SF tranches issued prior to 2009 contribute 99.9% of total SF losses. Approximately 95% of pre-crisis bond issuance is resolved (repaid or loss realized) or withdrawn.
The China Securitisation Market has seen phenomenal growth in the past few years. Hilary Tan, Senior Director and Head of Greater China Structured Finance, discusses the developments and key drivers behind the growth.
A widening array of innovative mortgage loans emerging this late in the economic cycle will merit some caution for U.S. RMBS investors, as Rachel Noonan discusses in our first 2019 Virtual Investor Meeting for Structured Finance.
Fitch Ratings has upgraded the rating on the class B notes from Fuyuan 2018-2 Retail Auto Mortgage Loan Securitization Trust , and affirmed the ratings on the class A1 and A2 notes. The transaction is a securitisation of Chinese automotive loan receivables originated by Ford Automotive Finance (China) Limited (FAFC), a wholly owned subsidiary of Ford Motor Credit Company LLC (BBB/Negative/F2).
Delegates at this year's Global ABS conference in Barcelona were considerably less optimistic about publicly-placed European structured finance issuance volumes compared to last year, according to a survey conducted by Fitch Ratings. Just 36% of respondents expected 2019 issuance volumes to beat last year's EUR162.3bn, down sharply from 77% in 2018 that expected a year on year rise.
Structured finance transactions in EMEA continued to perform well in 1Q19, with 83% of Fitch's ratings affirmed or kept stable (967 tranches), 16% upgraded (186 tranches) and only 1% (14 tranches) downgrade.
Unclear Euribor definitions could overstate the reported weighted average spread (WAS) of European collateral loan obligations (CLOs). Investors should examine the WAS definitions carefully to gain awareness of the possible WAS uplift due to negative Euribor and evaluate the impact of WAS adjustments when comparing CLO transactions.
The Fitch 30+ and 60+ Delinquency Indices remained stable in 1Q19, although the overall trend has been of gradually rising arrears since mid-2016, says in its latest index report for the sector.
Catch up on our latest webinar:
European Auto ABS 2Q19 Update available here On-demand
Falling house prices pose the most serious threat to Australian credit markets over the next 12 months, according to Australian fixed-income investors. The vast majority (95%) of investors expect house prices to keep falling over the next 12 months.
Fitch Ratings has started tracking the performance of transactions issued in the China Interbank Bond Market by publishing RMBS and Consumer ABS indices.
Total losses on EMEA structured finance (SF) are low and are concentrated in certain crisis-era transactions, Fitch Ratings says in a new report. More than three-quarters of all expected losses have now been realised.
However, the index is stabilising at a slightly higher level compared with 2017 due to a crackdown on cash loans, which has also affected borrowers that entered the car-finance market. An increase in issuers with shorter histories and a wider customer base may also be pressuring asset performance.
Falling house prices pose the most serious threat to Australian credit markets over the next 12 months, according to Australian fixed-income investors. Fitch Ratings and KangaNews' 2Q19 survey reveals that 70% of fixed-income investors rank a domestic housing-market downturn as the top risk to local credit markets, with a notable shift in sentiment. The survey was undertaken in partnership with KangaNews - a specialist publishing house that provides commentary on fixed-income markets in Australia and New Zealand.
Fitch Group and the Loan Syndications and Trading Association (LSTA) today announced that Fitch Group's leveraged loan expertise will now be available to LSTA members alongside the LSTA's other resources.
Welcome to the Asia-Pacific Structured Finance Newsletter. This newsletter presents a quick summary of structured finance news and developments in APAC each month.
A total of 227 tranches from the transactions in APAC were affirmed, with RMBS accounting for 110 tranches, followed by auto ABS at 60, credit card ABS at 42, unsecured consumer loan ABS at five, single borrower CMBS at five, structured credit at three and ABCP at two.
The falling number of over-indebtedness (OI) filings by French retail borrowers is neutral for French structured finance (SF) transactions. While the decline signals that fewer borrowers are struggling to repay their debts, those who do file are likely to have particularly weak credit profiles, reducing recoveries.
The discontinuation of LIBOR could introduce basis risk for the UK non-conforming and buy-to-let (BTL) RMBS markets if assets and liabilities reset to different reference rates. Senior tranches are well protected, but junior tranches of legacy non-conforming transactions and excess spread notes of more recent BTL securitisations are more exposed.
Now Available On-Demand
A series of comments published by Fitch on the transition away from IBOR.
Late-stage arrears in rated UK non-conforming pools have risen over the past six months while arrears for prime mortgages have been stable. Continued Brexit uncertainty point to downside risks for the UK mortgage market. Download our Mortgage Market Index report for the UK to learn more
Fitch’s Chief Credit Officer, Jeremy Carter, and Group Credit Officer, Andreas Wilgen, discuss the progress which has been made to prepare financial markets for the discontinuation of IBOR indices and highlight the risks which still remain.
