Impacts of Hurricanes Irma and Harvey on the Securitization Market

According to an article by Reuters, Moody's has released an impact report on the different issues facing the securitization market in the aftermath of hurricanes Irma and Harvey. One of the major impacts will be on cash flows into securitization trusts, especially for auto dealer floorplans, loans, and lease ABS, which are all expected to temporarily decline.

Another major impact will be on both the commercial and residential MBS markets. Nearly 9 percent of CMBS transactions have exposures to Harvey and Irma, while 8 percent of CRE CLOs have exposures. For RMBS, including SFR transactions, Moody's-rated deals on average have moderate to large exposure in Florida, though such exposure may be mitigated by insurance coverage, servicer responses, and deal structures.

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