S&P: Private RMBS Issuance to Slow

Issuance of U.S. private-label residential mortgage-backed securities will decline this year but remain strong enough to record the market's second-best year, Standard & Poor's Ratings Services is forecasting.S&P's forecast calls for private-label RMBS volume of as much as $900 billion in 2006, compared with a record $1.2 trillion in 2005. "The sector will experience generally strong rating performance, although increasing risks presented by the recent popularity of affordability products could contribute to deteriorating credit quality in the coming year," said S&P analysts Thomas Warrack and Ernestine Warner. Last year, the record RMBS issuance was led by the subprime sector's volume of $450 billion, while the alternative-A/B sector's volume doubled to more than $300 billion, S&P reported. The rating agency can be found online at http://www.standardandpoors.com.