Declining multifamily valuations are pushing up capitalization rates while reducing debt service coverage ratios.

Bank of America issued a resecuritization this week tied to a 2017 multifamily K-deal. It’s the first rated issuance of its kind from BofA since 2016. The new resecuritization received an A- rating.

The red-hot vehicle ABS market saw intense competition between S&P and Fitch for ratings supremacy. Kroll rode the resurgent ECM MBS market to boost its share of rated issuance. (Includes two data tables.)

Fitch and DBRS weathered the sharp drop in rated non-agency MBS issuance better than their competitors. S&P moved back to the top in ABS ratings at midyear despite losing some ground in the vehicle sector. (Includes two data charts.)

DBRS said it’s in talks with the SEC to resolve a potential enforcement action related to its compliance with recordkeeping requirements.

Fitch rode the market’s hottest sectors in the first quarter: vehicle-backed ABS and expanded-credit MBS. S&P slipped to second in ABS ratings and fourth in residential MBS. (Includes two data charts.)

The cocktail of recessionary risk and inflation is putting pressure on the performance of MBS and ABS. Some sectors will perform better than others.

S&P, Moody's and Fitch continued as the top rating services in non-agency MBS and ABS at the midway point in 2022, though Kroll held onto the lead in the RMBS market. (Includes two data charts.)

A study by the European Central Bank found evidence that rating services respond to their competitive environments by either inflating ratings or altering the strictness of their rating standards.

Only 4% of MBS and ABS assessed by Fitch received a positive rating impact from ESG factors. Meanwhile, S&P is set to expand its assessments in the ESG space.