NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases research discussing the recent developments in the structured finance markets.
The structured finance new issue market has been effectively frozen since mid-March and spread movements have been extreme, as investors looked to raise cash by selling shorter-dated, high-quality paper, while the bid further down the capital stack has been extremely limited. From a fundamentals perspective, there are only a few available data points to directly gauge how securitization credit performance has been impacted by recent events, as remittance reports are made available on a monthly basis and are reported with a lag.
April remittance reports, which are now just being released (and in most cases will report collections during the month of March), should provide us with our first insights, albeit possibly muted as early collections in March likely remained strong. We think that the swift policy response (including a $2.2 trillion federal stimulus package in March and an additional $484 billion of funding that passed through the Senate on April 21) providing direct economic assistance to American workers and small businesses, should help to soften the blow, but to what extent remains unknown.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.
Brian Ford, CFA
Structured Finance Research
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