A third of Money Partners' book in long-term arrears
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More than 30% of Money Partners’ loan book is in arrears of over 90 days, Moody’s revealed last week.
The ratings agency has down-graded around £607m of residential mortgage-backed securities issued by the lender.
The loans in arrears of more than 90 days - including outstanding repossessions - amount to around 31.9% and 34.3% of the current portfolio balance in Money Partners 3 and 4 respectively.
The affected tranches were placed on review in June last year following worse than expected collateral performance. Both securities include first and second charge loans.
The Goldman Sachs-owned len-der suspended new lending last February.
Losses in the last quarter amount to 27% and 44% for first charge and 120% and 160% for second charge loans in Money Partners 3 and 4 respectively.
Moody’s has assessed updated loan-by-loan information on the outstanding portfolio to determine the extent of the rise in credit support required and the volatility of future losses.
Considering the amount of realised losses and after completing a roll-rate and severity analysis for the non-defaulted portion of the portfolio, Moody’s has also revised upwards its loss expectations for both transactions.
For Money Partners 3 the total expected loss, including losses that have already occurred, has been increased from 5.2% to 7.5% of the closing portfolio balance, while for Money Partners 4 the expected loss assumption has been raised from 5.3% to 8% of the closing portfolio balance.
Moody’s has also factored into its analysis the negative sector outlook for UK non-conforming RMBS deals.
HML is the day-to-day servicer in both transactions, while special servicing and cash management are performed by Kensington.
Following a review of HML’s and Kensington’s servicing operations Moody’s is satisfied with the ability of both to perform their duties.
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