(The following statement was released by the rating agency)
Oct 03 - OVERVIEW
-- 90+ days delinquencies for both Celtic 9 and 10 have continued to rise since our previous full review in March 2011.
-- This, combined with the lack of repossessions and realized losses have led us to assume that the notes within these transactions are undercollateralized.
-- Consequently, we have lowered our ratings of all classes of notes in both transactions.
-- Celtic Residential Irish Mortgage Securitisation No. 9 and Celtic Residential Irish Mortgage Securitisation No. 10 are Irish RMBS transactions backed by mortgages originated by First Active--subsidiary of Ulster Bank Ireland.
Standard & Poor's Ratings Services today lowered its credit ratings on all classes of notes in Celtic Residential Irish Mortgage Securitisation No. 9 PLC (Celtic 9) and Celtic Residential Irish Mortgage Securitisation No. 10 PLC (Celtic 10) (see list below).
Today's rating actions follow the continued increases of severe arrears in these transactions, and deterioration of the Irish housing market. With lender forbearance measures and legal and regulatory frameworks in place, we have witnessed low levels of repossessions within these transactions. In order to address these risks, inherent within the Irish housing market, we have assumed that all loans that are more than nine months delinquent are in default, and will result in losses, with recoveries being realized at the end of our assumed foreclosure period. Consequently, and even with the benefit of recoveries, we have concluded that the class B notes in both Celtic 9 and 10 are effectively undercollateralized.
In analyzing this transaction, we have applied our general criteria for assigning and monitoring ratings (see "Principles Of Credit Ratings," published on Feb. 16, 2011).