Moody's Investors Service said Monday that the recent deadly floods and landslides in South Korea will have no credit-ratings impact on the country's residential mortgage-backed security (RMBS) and asset-backed security (ABS).
Last week's downpour-caused floods and landslides in Seoul, nearby Gyeonggi Province and the eastern province of Gangwon killed dozens of people, displaced thousands of others and damaged many cars.
"While landslides and flash floods have over the past week damaged houses in the region, over 90% of the properties backing the securitized loans for the RMBS transactions are high-rise apartment buildings," Moody's said in a press release. "As such, the flood waters should not affect them much."
It pointed out the notes are well protected by at least 14 percent subordination.
Moody's added there will be no major impact on ABS credit ratings, either, although a lot of luxury sedans were inundated.
"According to the loan agreement, a borrower cannot revoke the loan contract just because the car is damaged in a flood. As such, if the flood waters do damage any cars in the securitized pools, the impact on loan performance should be temporary," it said. (Yonhap News)
