Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's downgrades two Crédito Inmobiliario Construction Loan Securitizations in Mexico

 The document has been translated in other languages

21 Apr 2010

New York, April 21, 2010 -- Moody's de México ("Moody's") has downgraded two Mexican construction loan securitizations issued and serviced by Crédito Inmobiliario, as follows: CICB06 Series A certificates' underlying rating downgraded to Baa3 from Baa1 (Global Scale, Local Currency), and CICB08 Series A certificates downgraded to B3 from Baa3 (Global Scale, Local Currency) and to Ba3.mx from Aa2.mx (Mexican National Scale). All affected ratings remain on review for further possible downgrade.

Today's downgrades are based on the sharp deterioration in the portfolios' delinquency status and the significant decline in both interest collections and principal collections arising from home sales proceeds.

Defaulted loans (defined as 30 days past due in principal or 90 days past due in interest payments) increased from 0% as of November 2009 to 59% in both transactions as of the last servicer reports received (February 2010 for the CICB06 transaction and March 2010 for the CICB08 transaction). According to Crédito Inmobiliario, the main driver for the increase in delinquencies were developer defaults with respect to their scheduled monthly interest payments as a consequence of a lack of home sales.

Moody's notes that both transactions are currently in early amortization, therefore no new loans can be transferred to the trust. Once an early amortization of the certificates has been declared, all principal collections must be used to amortize the certificates after establishing the appropriate reserves to fund future disbursements for existing projects. The legal maturity for the CICB06 senior certificates is December 2016 while the legal maturity of the CICB08 senior certificates is May 2013.

During the review period, Moody's will focus on the causes for the sudden and simultaneous delinquencies of a high number of developers, the viability of the projects in the pools, the pace of home sales, the quality of the servicer's construction advance oversight, and the servicer's remediation strategies to cure delinquent and defaulted loans. Furthermore, today's rating action for the CICB08 certificates reflects a high probability of default on the CICB08 certificates. As a result, during the review period Moody's will focus on the level of recoveries expected on the CICB08 certificates.

CICB06 CERTIFICATES

Moody's has downgraded the underlying rating of the CICB06 senior certificates to Baa3 from Baa1 (Global Scale, Local Currency) and placed it on review for further possible downgrade. The current ratings of the senior certificates, Aa3 (Global Scale, Local Currency) and Aaa.mx (Mexican National Scale), are not affected. They are primarily based on the financial guaranty provided by Assured Guaranty, formerly Financial Security Assurance (Aa3 insurance financial strength rating) issued in favor of the senior certificate holders. The guaranty unconditionally and irrevocably guarantees timely payment of interest and payment of principal on the final maturity date of the senior certificates.

The downgrade of the CICB06 underlying rating is based on the rapid increase in portfolio delinquencies and the significant slowdown in sales. However, this transaction has certain positive features such as a static loan pool, a low bond factor of 11% for the CICB06 senior certificates, and six years before the legal final maturity date in 2016.

The securitized loan portfolio has displayed a dramatic increase in delinquencies, particularly in the higher delinquency buckets. The defaulted pool balance (defined as 30 days past due in principal or 90 days past due in interest payments) reached 59% as of February 2010, as compared to 0% three months earlier, while delinquencies greater than 31 days past due now represent 70% of the outstanding pool balance as compared to 34% as of November 2009.

Furthermore, approximately half of the securitized pool (49%) has had a change of only 5% or less in loan balance in the last 6 months, signaling that approximately half of the securitized pool has experienced either a slow pace of disbursements due to construction delays and/or a relatively low level of home sales proceeds applied to amortize the loan balance.

As of February 2010, the average construction completion rate for the underlying housing development projects was 88% across 39 projects, weighted by their total lines of credit amounts. The pool is concentrated in the low income segment with an average unit (home) value of approximately MXN$413,000. The low-income housing sector is less risky as it benefits from a housing shortage and more readily available mortgage financing from quasi-governmental entities. The maturity date of the loan with the latest maturity in the pool is August 2010, while the legal maturity of the transaction is December 2016, thereby providing a cushion of six years in the event that project or sales delays require extensions to the original maturity date.

Moody's notes that as of April 2010 the outstanding certificate balance is approximately MXN$75 million or 11% of the original Series A certificates' balance. Virtually all collections have been utilized to amortize the Series A certificates after establishing the reserves needed to make future disbursements on the construction loans. The transaction has approximately MXN$17.2 million in cash as of April 2010 and benefits from approximately 81% gross credit enhancement in the form of overcollateralization.

CICB08 CERTIFICATES

Today's downgrade of the CICB08 to B3 (Global Scale, Local Currency) and Ba3.mx (Mexican National Scale) reflects a rapid increase in defaults and delinquencies and a considerable slowdown in the pace of sales, which suggest heightened extension risk in this transaction.

The loan portfolio has experienced a sharp deterioration in performance in recent months, as the defaulted pool balance (defined as 30 days past due in principal or 90 days past due in interest payments) reached 59.3% in March 2010 as compared to 0% defaults reported as of November 2009. Delinquencies greater than 31 days past due have reached 81% of the outstanding pool balance as of March 2010, from 26.4% in November 2009.

Also, the monthly interest and principal collections have decreased significantly in the last four months. The monthly payment rate decreased from 2.3% as of November 2009 to 0.3% as of March 2010. According to the company, the very low payment rate, which is calculated by dividing the monthly principal collections by the prior month's construction loan pool balance, is a consequence of the significant slowdown in house sales. As a result, there is a higher risk that project delays may extend the life of numerous loans beyond the final maturity date of the transaction and that the rated certificates will not be fully paid by the legal final maturity.

Moody's notes that as of March 2010, approximately 83% of the pool has had a change of 5% or less in loan balance in the last 6 months, signaling that the loans have experienced either a slow pace of disbursements due to construction delays and/or a relatively low level of home sales proceeds applied to amortize the loan balance.

The maturity date of the loan with the latest maturity in the pool is August 2010, while the legal maturity of the transaction is May 2013, thereby providing a cushion of three years in the case of project or sales delays requiring extensions to the original maturity date. Nonetheless, the likelihood that this period of three years will be insufficient to amortize the underlying construction loans and repay the certificates in full has increased. Principal collections have been very volatile in recent months, and several projects have received and will require extensions to their original maturity dates for various reasons, including construction or sales delays. As of March 2010, the senior certificates had gross credit enhancement of 23% in the form of overcollateralization and cash holdings equivalent to MXP$82.9 million to protect against extension and default risk. However, some of these cash holdings may be needed to make future disbursements on loans that have not yet fully utilized their available lines of credit.

As of March 2010, the average construction completion rate for the underlying housing development projects was approximately 72% across 27 projects, weighted by their total lines of credit amounts. The pool is concentrated in the low to middle-income segment with an average unit (home) value of approximately MXN$486,000. The low-income housing sector is less risky as it benefits from a housing shortage and more readily available mortgage financing from quasi-governmental entities. Approximately 27% of the pool balance is comprised of vertical construction housing, which is riskier than horizontal construction, since the construction has to be nearly 100% built before sales can materialize.

Moody's believes that the CICB08 senior certificates exhibit certain structural features that increase transaction governance and strengthen the transaction, such as the periodic third party audit on collections, the static pool nature, and loans that have been originated with an accelerated amortization mechanism. However, based on the poor collateral performance and the inadequate current level of gross credit enhancement of 23%, Moody's believes that the probability of default on the rated certificates has considerably increased.

PRINCIPAL METHODOLOGY

The principal methodology used in these rating actions was Moody's Approach to Rating Low-Income Residential Construction Loan Securitizations in Mexico", published in August, 2009 and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.

RATING ACTION

The complete rating action is as follows:

Originator and Servicer: Crédito Inmobiliario S.A. de C.V.

Issuer: HSBC Mexico S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, acting solely as trustee.

-- CICB06 Series A Certificates: underlying ("shadow") rating downgraded to Baa3 from Baa1(Global Scale, Local Currency) and placed on review for possible downgrade. The last rating action occurred on January 5, 2010 when the underlying rating of Baa1 (Global Scale, Local Currency) was confirmed.

-- CICB08 Series A Certificates: downgraded to B3 from Baa3 (Global Scale, Local Currency) and to Ba3.mx from Aa2.mx (Mexican National Scale), and placed on review for further possible downgrade. The last rating action occurred on January 5, 2010 when the ratings were downgraded to Baa3 from Baa1 (Global Scale, Local Currency) and to Aa2.mx from Aaa.mx (Mexican National Scale).

New York
Maria Muller
Senior Vice President
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Victoria Moreno
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's downgrades two Crédito Inmobiliario Construction Loan Securitizations in Mexico
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com