Moody's: Irish prime RMBS performance continues to improve in July 2015

The Irish prime residential mortgage-backed securities (RMBS) market continues to improve in the three-month period ended July 2015, according to the latest indices published by Moody's Investors Service.

Arrears levels have decreased at both early and late stages on both a quarterly and annual basis. The 90+ delinquencies decreased to 15.77% of the outstanding balance in July 2015, from 16.71% in April 2015. The 360+ delinquencies (used as a proxy for defaults) decreased to 11.42% from 12.06% over the same period. The 30+ day delinquencies decreased to 17.89% in July 2015, from 18.86% in April 2015 and 21.87% in July 2014. However, the Irish RMBS market still displays higher delinquency ratios than its European peers.

Continued stabilisation of the housing market, robust employment trends and gradual restoration of consumer confidence will lead to a further measured reduction in arrears. Nonetheless, the significant decrease in arrears displayed in the Irish RMBS market during the last periods might be driven, not exclusively because of the improving economic environment but by the increased use of restructurings.

Outstanding repossessions remained stable at 0.38%, and cumulative losses rose to 0.16% in July 2015 from 0.14% in April 2014. Over the same period, the constant prepayment rate decreased to 1.38% from 1.48% and total redemption rate decreased to 5.41% from 5.53%.

Moody's outlook for Irish RMBS remains stable