Today, Fitch Ratings released the first issue of its 'Mexican RMBS Performance Quarterly Report'. This installment provides an overview of the Mexican residential mortgage-backed securities (RMBS) market during the first quarter-2008 (1Q'08), as well as a detailed analysis of the performance of transactions currently rated by Fitch.
During 1Q'08, mortgage portfolios experienced a general increase in delinquencies. While the pools securitized by banks exhibited a greater percentage increase during this quarter than SOFOLES, they continue to perform better in absolute terms as they are generally targeting higher quality borrowers. INFONAVIT's pools showed an increase in delinquency as well; however, recent transactions are performing better than older transactions.
'Despite the increase in delinquencies during this quarter, the majority of the portfolio continues to perform in line with Fitch's original expectations, there continue to be no signs of any contagion effects related to the US subprime crisis,' said Greg Kabance, Managing Director in Fitch's Latin America Structured Finance Group.
As a result of the recent turmoil faced by the financial guarantors, Fitch has downgraded its local ratings of two senior notes fully wrapped by Financial Guaranty Insurance Company (FGIC) to 'AA+(mex)' from 'AAA(mex)'.
Even though risk premiums have been increasing in the past few months there have been eight issuances since the beginning of 2008. Sociedad Hipotecaria Federal (SHF) has been playing an active role in the market as it has been increasing its support to many transactions. This support has come in the form of increasing Garantia de Pago Oportuno (GPOs) and direct investment in certain transactions.
New issues of Fitch's 'Mexican RMBS Performance Quarterly Report' will be published on quarterly basis and can be found on the Fitch Ratings web site at www.fitchratings.com. The inaugural edition of the report is available under the following headers on the Fitch web site:
Structured Finance then International then Special Reports
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
