Moody's highlights new trends affecting credit quality in US securitizations

New York, June 26, 2014 -- Several trends signal the potential for higher credit risks as the US securitization market continues its post-financial-crisis resurgence. In many cases, however, sponsors are building in subordination levels and other structural features that result in higher credit quality, which supports ratings assigned by Moody's Investors Service, according to a new report from the rating agency, "US Structured Finance Snapshot: Many Transactions Sufficiently Address Rising Credit Risks." The degree of weaker underwriting and collateral quality in structured transactions varies from sector to sector. The introduction of innovative deal structures and hybrid asset classes, and the entry of new untested issuers to the market, also elevate credit risk, according to Moody's.

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