With a default likely on the horizon for Greece, how profoundly
securitized deals from that region fare depends on the type of default
that takes place, according to Fitch Ratings in its upcoming Structured
Finance Snapshot reports for the US and EMEA.
Fitch expects Greece to undertake an orderly debt restructuring, which
would ensure that a payment system is in place. This would be the more
beneficial outcome for Greek securitizations because with banks
benefiting from supra-national institutional support, securitisations
should continue to operate effectively.
However, a disorderly default, which may include an exit from the
Eurozone, cannot be wholly discounted and would yield a more detrimental
outcome for Greek structured finance deals. A disorderly default would
disrupt payment systems leading right down to structured finance
noteholders. Interruption of interest payments by an issuer would
constitute a note default, though amounts due may still be recovered
eventually.
An exit from the Eurozone would compound the problem as a devalued new
drachma will almost certainly result in a shortfall on euro denominated
notes.
Fitch's quarterly Snapshot provides a detailed analysis of developments
in the structured finance sector and was created in response to investor
requests for high quality, transparent and timely research and ratings
analysis. The reports will be available shortly via the structured
finance sector pages at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'
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DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
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IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
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