Australian RMBS issuance gets tougher as Fitch confirms LMI criteria

On August 10 Fitch Ratings (Fitch) changed its global criteria for lenders' mortgage insurance (LMI) within residential mortgage-backed securities (RMBS) transactions, with the rating agency expecting RMBS deal ratings in Australia to be the most adversely affected. The criteria confirm proposals made in an exposure draft announced by Fitch on May 17, and will require Australian and New Zealand RMBS issues to provide higher credit enhancement, beyond LMI and excess spread, to secure a Fitch rating.