We think they pose substantial credit risks as they provide a lien on the equity of the entity or entities that own the single family homes and not on the key collateral. The newsletter also includes a market update, Moody's Analytics' predictions for the sector in the new year, and our take on the new CPFB rule on qualified mortgages... Full Report

We describe our proposed methodology to rating SFR securitizations, which will typically be backed by one or a few loans to one or a few entities that own and lease a large portfolio of single-family homes. We derive this methodology from our large-loan rating methodology for CMBS for the legal structure and governance, and from our RMBS methodology for the valuation of the assets... Full Report

The availability of federal Medicare coverage for a growing number of state and municipal retirees is helping these governments achieve significant savings on retiree health care costs and reduce “other post-retirement benefits,” or OPEB, liabilities. Initiatives to trim the costs of benefits to Medicare-eligible retirees include cost-shifting as well as initiatives to reduce the growth of health costs more directly... Full Report

Default rates for infrastructure projects have risen but remain better than average for project finance bank loans generally. The 10-year cumulative default rate for the infrastructure sector is 6.6%, somewhat higher that the 5.2% shown in our previous study published in February 2013. More generally, we find that project finance is a resilient class of specialised corporate lending, with most project finance borrowers highly leveraged, thinly capitalised special purpose vehicles with limited financial flexibility... Full Report