Moody's downgrades £607m of Money Partners RMBS

24 June 2010 | By Natalie Thomas

The 25 affected tranches, Money Partners 3 and Money Partners 4, were all placed on review in June 2009 due to worse than expected collateral performance.

The Goldman Sachs owned lender suspended new lending in February 2009.

Both securities include first and second charge loans.

The loans in arrears by more than 90 days, including outstanding repossessions, amount to approximately 31.9% and 34.3% of the current  portfolio balance in Money Partners 3 and 4, respectively.

The severity of losses experienced in the last quarter amounts 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 of the outstanding  portfolio to determine the increase in credit support needed and the volatility of future losses.

Considering the current amount of realised losses, and 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, inclusive of the losses already occurred, has been increased from 5.2%  to 7.5% of the closing portfolio balance, while for Money Partners 4 the  expected loss assumptions have been increased from 5.3% to 8.0% of the closing portfolio balance.

Moody’s has also factored into its  analysis the negative sector outlook for UK non-conforming RMBS.

Homeloan Management Limited is the  day-to-day servicer in both transactions, while the special servicing and  cash management are performed by Kensington Mortgage Company.

Following a review of Homeloan Management Limited’s and Kensington Mortgage  Company’s servicing operations, Moody’s is satisfied with the ability of both to perform their duties

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