Structured finance upgrades soar in Q1
Upgrades of global structured finance tranches in the first quarter of 2006 outnumbered downgrades by 4.1 to 1, Fitch Ratings said today. The ratio compares with 1.1 to 1 for the same period in 2005 and 2.5 to 1 for the whole of 2005.
The performance of European structured finance transactions has been weak in contrast, with a poor performance in collateralised debt obligations (CDO) resulting in a ratio of 2.9:1, a fall from the previous year. Last year there were 10.3 upgrades for each downgrade, up from the 2:1 ratio in 2004.
“European CDO performance in the first quarter has been mixed,” says Shaun Baddeley, senior director at Fitch Ratings in London. “Negative rating actions were exclusively for synthetic tranches and
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