(The following statement was released by the rating agency)
Dec 19 -
OVERVIEW
-- A pool of recourse apartment loans and housing loans that a major mortgage lender originated ultimately secure the transaction.
-- The performance of the underlying apartment loans is within our expectations, while that of the housing loans is almost within our expectations.
-- We have affirmed our ratings on classes A1 to D issued under the transaction.
Standard & Poor's Ratings Services today said that it has affirmed its ratings on the class A1 to D notes issued under the Godo Kaisha JLOC-M1 transaction (see list below).
In analyzing the credit quality of the transaction, we examined the performance data contained in the reports that we receive each month from the trustee or servicer.
Following our review, we affirmed our ratings on the transaction because (1) the occupancy rate of the apartment loans in the underlying pool is within our expectations; (2) the default rate of the apartment loans has remained low; and (3) the performance of the housing loans is almost within our expectations.
This transaction adopts a reverse turbo structure, where excess spread is used to redeem the class A1 to D notes from the lowest-rated class after allocation to a loss trap. Since closing, the transaction has generated stable excess spread, leading to progress in the redemption of principal on class D. As such, we expect class D to redeem earlier than classes A1 to C, unless the performance of the underlying assets materially changes.
A pool of recourse apartment loans and housing loans that a major mortgage lender originated and entrusted with Mizuho Trust & Banking Co. Ltd. ultimately secures the notes issued under this transaction. Apartments and residences that major homebuilders built secure the loans. Apartment loan receivables constituted 95.6% of the pool, while the remaining 4.4% were housing loan receivables, as of the issuance date.
RELATED CRITERIA AND RESEARCH
"Counterparty Risk Framework Methodology And Assumptions," Nov. 29, 2012 "Japan RMBS: Post-Disaster Outlook Is Stable For Most RMBS Deals In Fiscal 2012," April 9, 2012
"Japanese Structured Finance Scenario And Sensitivity Analysis: The Effects Of Major Macroeconomic Factors," April 6, 2012
"Principles Of Credit Ratings," Feb. 16, 2011
"Rating Methodology For Residential Mortgage-Backed Securities In Japan," Aug. 19, 2007
"Rating Methodology For Apartment Loan Securitizations In Japan," July 11, 2004
RATINGS AFFIRMED
Godo Kaisha JLOC-M1
JPY26.77 billion secured notes due 2044
Class Rating Initial amount
A1 AAA (sf) JPY17.47 bil.
A2 AAA (sf) JPY5.0 bil.
B AA (sf) JPY2.0 bil.
C A (sf) JPY1.2 bil.
D BBB (sf) JPY1.1 bil.
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