Moody's Changes Its Approach to Rate Indian RMBS

Global rating agency Moody\'s tweaked its approach to rate Indian residential mortgage- backed securities (RMBS).

Published: 05th May 2016 09:05 PM  |   Last Updated: 05th May 2016 09:05 PM   |  A+A-


NEW DELHI: Global rating agency Moody's today tweaked its approach to rate Indian residential mortgage- backed securities (RMBS), to reflect the country specific elements.

"Moody's Investors Service has published its approach to rating Indian residential mortgage-backed securities (RMBS) transactions, using the Moody's Individual Loan Analysis (MILAN) framework," the rating agency said in a statement.

Under this MILAN approach, Moody's perform a portfolio analysis, including a loan-by-loan assessment of the securitised collateral pool.

RMBS are pools of residential mortgage loans, which could include different types of fixed or floating rate loans, such as prime, sub-prime and others.

Moody's has used parameters from the New Securitisation Market (NSM) settings of MILAN for Indian residential mortgage pools, with some changes to reflect India-specific elements, it added.

"While we have used the NSM settings, we have made changes to some underlying assumptions and parameters for the Indian market, taking into account some distinctive characteristics of the country’s mortgage sector," the rating agency said.


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