MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it has seen a sharp fall in the number of securitized transactions rated and its issuance amount during the first quarter 2008 as compared to last year, given that investors are taking an increasingly cautious stance toward structured finance transactions across the world.
Securitization transactions worth 1.1136 trillion yen have been rated in Japan in the first quarter January 2008 to March 2008, marking a 35.8 percent decrease from the previous year. And, the number of securitized transactions rated by S&P fell to 35, down about 30 percent in this period.
There have been no reports of mortgage loan defaults spiking up in Japan, and there is no observed deterioration in the performance of securitization transactions exposed to residential mortgage loans, said S&P.
But the number of new ratings assigned to securitization transactions has also seen a fall in the first quarter of 2008, said S&P, adding that the issuance amount of asset-backed securities (ABS) and commercial mortgage backed securities (CMBS) transactions decreased by about half, and that of the residential mortgage backed securities (RMBS) transactions fell about 30 percent from the previous year.
The performance of RMBS deals backed by subprime loans in the U.S., and those of collateralised debt obligation (CDO) transactions that incorporate such RMBS deals have worsened and their prices have fallen, added S&P.
In contrast, the issuance amount of CDO transactions rated by S&P increased in the first quarter, because of the launch of a securitization program in February 2008 for loan receivables extended to government-related entities.
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