The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Structured finance: Moody’s to report on US sub-prime RMBS pre-sale

Moody’s announced in February its intention to start publishing pre-sales reports for the faltering US sub-prime RMBS market. These reports will include opinions on the expected cumulative losses and key structural considerations, as well as a transaction’s provisional rating.

"These reports will open a dialogue with investors during the period when they need information the most," says Warren Kornfeld, a managing director in Moody’s structured finance group.

But why now? Moody’s has never published pre-sales reports in this market before, and some may see their decision as an indicator of the worrying deterioration of credit quality in the US sub-prime RMBS market.

Moody’s maintain that the timing of the announcement is coincidental, as the lengthy process required to put together these publications began more than a year and a half ago. And although there was investor demand for this information 18 months ago, that demand is markedly higher now. Two of the biggest lenders in the US sub-prime RMBS market, HSBC and New Century Financial Corp, have been forced to set aside more money than previously expected to cover projected losses. HSBC’s provisions were 20% higher than forecast at $10.6 billion. New Century’s share price fell 36% after it issued a warning of weaker results as a result of rising defaults.

Coincidence or not, Moody’s publishing of these reports is being done in an extremely timely fashion. Delinquency rates are higher than at any time since the recession of 2001.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree