S&P Global Ratings recently revised its outlooks on 25 Australia-based financial institutions to negative, reflecting the ratings agency's house view that there is now a one-in-three chance that it will lower these ratings in the next two years.S&P has followed up with a rhetorical Q&A style article, setting out the effects of its actions. Below is a heavily edited version.As S&P notes in its first comment, structured finance instruments do not typically carry outlooks, therefore there is no accompanying outlook change. In any case, the underlying credit ratings for the financial institutions are unchanged, so there is no related change to the structured finance ratings.In addition, of the 16 Australian financial institutions that play a dependent role in structured finance transactions, the main roles are that of swap provider (either interest rate or currency), bank account provider, and liquidity provider.In any case, a lowering of the rating is unlikely to leave agencies any chance for something else as many ratings are supported by transaction structures. "These build up support over time and this creates a buffer to the potential impact of any changes in counterparty ratings," said S&P. Further, the performance of collateral across structured finance asset types in Australia and New Zealand remains stable."Residential mortgage-backed securities make up the largest asset class. Housing loan arrears in August 2016 were up year on year, but remain below their peak and the average for the past ten years. Consumer asset-backed securities continue to benefit from relatively benign economic and employment conditions," S&P concludes.