Moody’s Australian RMBS Performance Review released yesterday confirmed the startling lack of activity in capital markets over the last year.
Australian RMBS issuance for the fourth quarter of 2007 was just $2.17 billion – 80.5 per cent down on the fourth quarter of 2006.
Over the year the Commonwealth Bank was the biggest issuer of RMBS, with one single deal worth $7.1 billion. Challenger was the largest non-bank lender to issue RMBS, with three deals totalling $3.4 billion.
Arrears greater than 30 days remained stable in the fourth quarter at 1.09 per cent but Moody’s forecast arrears to trend upwards in light of recent interest rate rises and the slowing economy.
Moody’s also observed a strong improvement in non-bank arrears however they continue to be approximately twice those of the banks.