Moody's: Russia/CIS RMBS Delinquency Levels Increasing

Delinquency levels of residential mortgage- and asset-backed securities transactions in Russia and the Commonwealth of Independent States appear to be trending upward, according to a new Moody's Investors Service report. Delinquency levels have increased over the past two quarters and only one RMBS transaction rated by Moody's has closed in the two markets this year. "The Russian economy is in its worst recession since the 1998 crisis," said Nitesh Shah, a Moody's economist and co-author of the report. "Ruble depreciation has led to higher U.S. dollar mortgage obligations for many obligors, which — combined with falling house prices and the elevated risk of unemployment — does not bode well for obligors or the RMBS transactions in the sector that are exposed to U.S. dollar-denominated mortgages." Maria Divid, a Moody's senior associate and co-author of the report, said delinquencies increased in all RMBS transactions over the first half of the year.