Moody’s: Q2 ABS delinquencies rise

By Chris Becker

From Moody’s yesterday:

Moody’s: Australian ABS delinquencies up in Q2; losses stable

Sydney, August 14, 2012 — Moody’s Investors Service says that the delinquencies and losses for Australian ABS transactions rose slightly in Q2 2012, and losses will remain stable for the rest of 2012.

“Delinquencies increased by several basis points in Q2 from Q1 across most programs, but have remained stable through the first half of 2012. The minor uptick will not have a major impact on either defaults or losses as recovery rates across asset types remained stable at 45% to 55%,” says Alena Chen, a Moody’s Analyst.

“Specifically, from April to June, cumulative defaults for the 2007 to 2010 vintages were in the 0.9%-2.1% range, while net losses were in the 0.5%-1.1% range,” says Chen, who was speaking on the release of Moody’s “Australian ABS Performance Review: Q2 2012.”

“Looking ahead, we expect a stable performance for both defaults and net losses for all vintages. The overall stability of the ABS market is mainly due to the resilient macro-economic conditions evident in Australia,” adds Chen.

“The stable outlook, first assigned in Q1 2010, is also supported by the accumulation of credit enhancement and the strong credit quality of receivables originated within Australian ABS,” says Chen.

The majority of the outstanding transactions are backed by motor vehicle and commercial equipment leases — a well-performing and stable asset class.


Chris Becker is an investment strategist at Macro Investor, Australia’s leading independent investment newsletter covering stocks, trades, property and fixed interest. Each week Macro Investor publishes tables on the top ten most undervalued and overvalued stocks on the ASX. A free 21-day trial is available at the site.

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