Moody’s has downgraded the ratings of Irish residential mortgage-backed securities in the Emerald 4 and Kildare programmes.

The level of arrears of 90 days or more has risen to 8.3 per cent and 5.9 per cent respectively since the previous review in July 2011.

The international ratings agency expects that rising unemployment coupled with lower income arising from austerity measures will continue to hurt borrowers’ ability to meet their financial obligations.

“The new Irish personal insolvency legislation proposed in January could also have a negative impact on the ratings of the notes as it might lead to a write-down of the mortgage debt supporting the notes,” Moody’s added.