KBRA Publishes RMBS Research: RMBS 2.0 Exposure to Hurricane Harvey Affected Counties

NEW YORK--(BUSINESS WIRE)-- On August 26, 2017, Hurricane Harvey made landfall in the United States as a Category 4 hurricane through the Gulf coast of Texas. Hurricane Harvey is the first major hurricane to make landfall in the U.S. since 2005, with some initial damage estimates in the tens of billions. As of the morning of August 28th, 54 counties have been declared disaster areas by the state of Texas and five by the state of Louisiana. The Federal Emergency Management Agency (FEMA) has also placed 24 of those counties under a disaster declaration. Hurricane Harvey, which has been downgraded to a tropical storm, is expected to remain in the Gulf area until at least August 31, 2017.

Kroll Bond Rating Agency (KBRA) has evaluated exposure to these areas across its outstanding ratings spanning 79 private label transactions (PLS) and 22 agency credit risk transfer transactions (CRT). KBRA used the Texas and Louisiana declared disaster areas, specific to Hurricane Harvey and as of August 28, 2017, to identify properties in the related securitizations. Within these counties, this process for identifying exposures could overestimate exposure relative to actual damage as effects of the storm may be localized within a given county. However, given that the storm is still active in the area, the affected area may increase in size through the coming weeks.

Across 101 rated transactions, with an estimated total outstanding collateral balance (affected balance) of $653 billion, KBRA estimates that 2.8% of the collateral in its rated transactions are located in one of the aforementioned disaster declared counties. KBRA will continue to monitor information from loan servicers to determine the full extent of any damages to the underlying trust collateral, as well as any related delinquencies. A full list of estimated exposures in these 59 counties, by affected balance, is available in the full report.

Additional detail is available in our full report.

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

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Kroll Bond Rating Agency

Analytical Contacts:

Ashish Sharda, 646-731-2415

Director

asharda@kbra.com,

or

Jack Kahan, 646-731-2486

Managing Director

jkahan@kbra.com

or

Ryon Aguirre, 646-731-2382

Associate Director

raguirre@kbra.com

Source: Kroll Bond Rating Agency