As servicers continue to process the damage from COVID-19, this week we focus on the trends in loan modifications for the most affected property types: lodging and retail. While it is still early in determining the best course of action for many of these loans, we are seeing a much higher rate of lodging loans being modified than retail (in terms of both the number of loans and loan balance). Further review of the comments related to these modifications indicates that most of the lodging modifications involve releasing reserves. Retail loan modifications, on the other hand, include a mix of forbearance of payments over a limited time period and a release of reserves.

In closely monitoring the diverging trends, early evidence points toward a combination of operational differences and industry sentiment. Generally speaking, retail establishments run very lean in terms of liquid assets.  Restaurants often have no more than a few weeks of reserves to call upon in...

The complexity introduced into financial reporting by the IFRS 9 accounting standard has proven to be a major challenge. Measuring and reporting on the future performance of credit portfolios has introduced new data, analytics, and financial processes. Moody’s Analytics solutions for IFRS 9 are modular and flexible, to help institutions of any size meet the standard while strengthening their risk management and decision-making processes.

The ImpairmentStudio™ for IFRS 9 platform is central to our IFRS 9 offering. This cloud-based software lets customers automate their impairment analysis while managing and monitoring their expected credit losses efficiently. The solution encompasses our award-winning economic forecasts, scenarios, data, and models.

“We’re honored to win these two awards again,” said Cris deRitis, Deputy Chief Economist at Moody’s Analytics. “The upheaval caused by COVID-19 reminds us that the expected credit losses that must be...

Join us for an interactive discussion with Jamie Woodwell, Vice President, Research and Economics at the Mortgage Bankers Association, as we discuss the latest trends for loans supported by multifamily and commercial properties, given COVID-19. Topics include:

Join us for an interactive discussion with Jamie Woodwell, Vice President, Research and Economics at the Mortgage Bankers Association, as we discuss the latest trends for loans supported by multifamily and commercial properties, given COVID-19. Topics include:

Presented by Victor Calanog, PhD 

Victor Calanog from the Analytics team discusses how the US industrial property market (particularly warehouse distribution facilities and data centers) is set to further benefit post COVID-19.

Download the full report.

Join us for an in-depth analysis of CRE loan performance and credit risks under Moody’s latest economic and real estate scenarios. In a case study format, we will illustrate how to translate an economic outlook into loan-level measures of credit risk to help you better quantify and manage the performance of your CRE portfolio.

NEW YORK, July 9, 2020 – Moody’s Analytics has won Enterprise-Wide Stress Testing Product of the Year and Credit Stress-Testing Product of the Year in the 2020 Risk Technology Awards. They’re two of our seven wins in this year’s awards.

Credit loss forecasting models are only as effective as the data on which they were built, and few, if any, were designed to capture the effects a sudden pandemic would unleash on the U.S. economy. In times like this, how are financial institutions determining the right amount to set aside for future credit losses?

The COVID-19 pandemic and the associated slowdown in the economy have pushed many financial institutions and corporations to reevaluate the framework under which they reserve for credit risk in their allowance models. 

The coronavirus outbreak generated an unprecedented health crisis that is affecting people and countries all over the world. However, the pandemic is causing consequences far beyond the spread of the disease itself. With time, the dramatic socioeconomic impacts due to the lockdown appear clearer and more complex. COVID-19 is putting banks' operational resilience under pressure. This paper addresses the implications of the coronavirus on banks in terms of regulatory reporting. It illustrates how software-as-a-service (SaaS) technology can provide solutions by enabling banks to be agile during the current crisis, future shocks, and remote working.

 

Download the 'Operational resilience in the time of COVID-19: SaaS to the rescue' paper to find out more.

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Overview Moody’s Analytics Project Finance Data Consortium was established in 2010 with leading sector lenders to study the credit profile of project finance bank loans. In response to increasing regulatory pressure and funding costs, the consortium was designed to enhance the understanding of default and recovery behavior and to facilitate further evolution of the asset class. Furthermore, the participants—which now number 75 global institutions (banks, insurance companies, and asset managers)—view the consortium as a key to promote transparency, increase liquidity, and assist with capital relief under Basel capital requirements.

Moody’s Analytics collected data from 8,583 project loans and losses (consortium dataset) from the consortium members. The project loans originated from 1983–2018. The dataset contains 587 project loan defaults based on the Basel definition of default and 289 ultimate recoveries. The definitions of project finance, the Basel...

NEW YORK, June 29, 2020 – Moody’s Analytics has added new capabilities to the ImpairmentStudioTM platform, our Current Expected Credit Losses (CECL) solution, to help financial institutions address the implications of COVID-19 for their loan portfolios. 

Community and regional banks, credit unions, and corporations using the cloud-based ImpairmentStudio solution will now be provided with a measure of COVID-19 exposure on their loan books, which takes into account demographic and epidemiological factors associated with COVID-19 as well as the efficacy of government relief programs. Adjusting Your Allowance Framework for COVID-19 and Related Stimulus Programs, a new Moody’s Analytics whitepaper, provides more information. Through the ImpairmentStudio platform, customers can also access award-winning Moody’s Analytics economic forecast scenarios. These scenarios are driven by different assumptions regarding the epidemiology of COVID-19,...

Our AXIS™ solution was recognized as Actuarial Modeling Solution of the Year. It is a comprehensive actuarial software solution for modeling of insurance and annuity products with unparalleled flexibility, constantly updated to address accounting standards and financial reporting regulations that evolve over time. Clients use the AXIS solution for their pricing, reserving, asset and liability management (ALM), capital calculations, and hedging.

The AXIS solution provides the flexibility to deploy large-scale computing power through our advanced distributed-computation capabilities that allow us to scale calculation over thousands of CPUs—whether on-premises or through the cloud—reducing calculation times to a fraction of those required with a traditional setup.

The Moody's Analytics Scenario Generator was recognized as ESG (Economic Scenario Generator) Software of the Year for its effectiveness in helping insurers perform sophisticated...

“We’re honored to have earned seven Risk Technology Awards this year,” said Steve Tulenko, President of Moody’s Analytics. “It is particularly gratifying that these awards recognize both our longstanding capabilities, like credit data and modeling, and newer offerings like pensions ALM and IFRS 9 accounting.”

“We congratulate Moody’s Analytics on another fine showing,” said Antony Chambers, Publisher of Risk. “Seven awards is an impressive accomplishment and showcases their capabilities across credit, finance, regulatory, and accounting functions.”  

The Risk Technology Awards recognize outstanding vendors helping the industry in the fields of ALM, credit, operational risk, and enterprise risk management. They are decided by a judging panel of technology users and the editors of Risk.net.

These wins add to our growing list of awards and industry accolades.

About Moody’s Analytics Moody’s Analytics provides financial intelligence and...