Fitch: U.S. Structured Finance at a Crossroad in 2010

December 7, 2009

Overview Even though the U.S. economy appears to be on a path toward recovery (albeit a slow one), Fitch Ratings expects weaker collateral performance across all structured finance sectors next year. Fitch expects the pace of downgrades to slow in areas such as RMBS, CMBS and CDOs given the magnitude of ratings downgrades and the prospective stresses built into the actions taken to-date. At the same time, sectors that have remained resistant to the downturn (consumer ABS) will likely see more negative pressure on collateral and, potentially, ratings on a relative basis, as fundamental improvement to key aspects of consumer health remain elusive.

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