Moody's Weaker Global Economy to Result in Tighter Underwriting and Poorer Securitization Performance, but Impact Will Vary Widely

The weak global economy will lead to tighter-than-expected underwriting in the second half, and continue to weaken the performance of structured finance transactions around the globe, though in uneven ways across sectors and countries.

The attached report represents Moody's structured finance credit analysts updated views on the factors influencing the credit quality of securitizations of all kinds, given the unprecedented economic shocks that followed the coronavirus pandemic.

The report incorporates and sums up many of the opinions we have shared through our research since the onset of COVID 19.

 Two key takeways:

» New deal collateral and structures will strengthen in many major asset classes to cope with recessionary performance trends

» Collateral performance will remain weak, but negative credit impact of pandemic will be most evident for junior notes

Click here for the full report:

https://www.sfnet.com/docs/default-source/tsl-tslexpress/sfg-h2-2020-outlook.pdf?sfvrsn=ce9eca5d_2