Fitch: Rating Performance Rebalances in 2013 for Global SF

NEW YORK--()--Link to Fitch Ratings' Report: Fitch Ratings Global Structured Finance 2013 Transition and Default Study http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736335

Global structured finance (SF) rating activity was far more balanced in 2013, according to Fitch Ratings. Downgrades declined to pre-crisis levels and upgrades became more visible. While downgrades continued to outnumber upgrades by a margin of 1.7 to one, the downgrade rate at 10% declined to its lowest level in six years. Conversely, the upgrade rate rose to 6%, breaking a five-year pattern of muted upgrade activity.

The number of SF impairments (consisting of default or near-default) declined considerably in 2013 ending the year at 2.2% compared with 5.6% in 2012. Across each of the major SF sectors, there were no impairments recorded at the 'AAAsf' level in 2013. The impairment rate for investment-grade bonds was negligible, at 0.05% in 2013. The non-investment grade SF default rate was 5.8%.

There was a significant increase in the number of bonds paying in full (PIF) in 2013 - 11.8% compared with 9.4% the prior year. In particular, 19.7% of 'AAAsf' bonds PIFed over the course of the year. Rating stability at the 'AAAsf' rating level reverted to the long-term average, with 95% of the highest rated credits either remaining unchanged or PIF for the year, up from 72% in 2012.

Fitch's latest transition and default study provides data and analysis on the performance of its global SF ratings in 2013 and over the long term, covering the period 1990-2013. The report provides summary statistics on the year's key rating transition and impairment trends. The methodology used has changed in the 2012 report to allow for a more detailed depiction of SF rating performance, by including rating migrations to PIF and Withdrawn.

The study is titled, 'Fitch Ratings Global Structured Finance 2013 Transition and Default Study' is available at 'www.fitchratings.com' under the following headers:

Market Focus >> Credit Market Research >> Research

Additional information is available at 'www.fitchratings.com'.

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Contacts

Fitch Ratings
Stephanie Mah, +1-212-908-0884
Senior Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Stuart Jennings, +44 (0)20 3530 1142
Managing Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Stephanie Mah, +1-212-908-0884
Senior Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Stuart Jennings, +44 (0)20 3530 1142
Managing Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com