Fitch: RMBS Up/Down Ratio 12-1 in '04

The ratio of upgrades to downgrades on residential mortgage-backed securities was nearly 12 to 1 in 2004, according to Fitch Ratings.The ratio was actually down for the year, owing to a "notable slowdown" in refinancing activity in the second half, but it still contributed strongly to the overall positive upgrade/downgrade ratio of 2.36 to 1 for all structured finance transactions, the rating agency reported in a new study of structured deal ratings for last year and since 1991. The ratio stood at 1.95 to 1 in 2003. In contrast to the somewhat lower ratio of upgrades to downgrades for RMBS last year, upgrades were "up significantly across all the other major structured finance sectors, including asset-backed securities (upgrades doubled relative to 2003), commercial mortgage-backed securities (up 26%), and collateralized debt obligations (up 70%)," Fitch reported. The rating agency can be found online at http://www.fitchratings.com.