(The following statement was released by the rating agency) Link to Fitch Ratings' Report(s): https://www.fitchratings.com/site/re/10115365 https://www.fitchratings.com/site/re/10115366 https://www.fitchratings.com/site/re/10115367 https://www.fitchratings.com/site/re/10115368 https://www.fitchratings.com/site/re/10115369 https://www.fitchratings.com/site/re/10115370 https://www.fitchratings.com/site/re/10115371 Fitch Ratings-Sydney-April 08: Fitch Ratings has upgraded one and affirmed 17 note classes in seven Torrens Series transactions. The transactions consist of notes backed by pools of first-ranking Australian residential full-documentation mortgage loans. All mortgages were originated by Bendigo and Adelaide Bank Limited (BEN, A-/Stable/F2) and the notes were issued by Perpetual Trustee Company Limited in its capacity as trustee. The social and market disruption caused by the coronavirus pandemic and the related containment measures do not negatively affect the ratings, as they are sufficiently supported by credit enhancement and adequate liquidity under Fitch's base-case scenario. The upgrade of the class C notes from Torrens Series 2017-1 Trust is due to the build-up of credit enhancement, meaning that the rating constraint due to concentration is now 'A+sf'. The Stable Outlook is based on the notes' ability to withstand the sensitivity to higher defaults stemming from the pandemic, as our high-investment-grade rating scenarios ensure more stress. TORRENS Series 2017-2(P) Trust ----A AU3FN0036463; Long Term Rating; Affirmed; AAAsf; RO:Sta ----AB AU3FN0036471; Long Term Rating; Affirmed; AAAsf; RO:Sta TORRENS Series 2019-1 Trust ----A AU3FN0048336; Long Term Rating; Affirmed; AAAsf; RO:Sta ----AB AU3FN0048344; Long Term Rating; Affirmed; AAAsf; RO:Sta TORRENS Series 2014-1 Trust ----A AU0000TNHHB2; Long Term Rating; Affirmed; AAAsf; RO:Sta TORRENS Series 2019-2 Trust ----A AU3FN0051223; Long Term Rating; Affirmed; AAAsf; RO:Sta ----AB AU3FN0051280; Long Term Rating; Affirmed; AAAsf; RO:Sta TORRENS Series 2014-2 Trust ----A AU0000TOZHA4; Long Term Rating; Affirmed; AAAsf; RO:Sta ----AB AU3FN0026001; Long Term Rating; Affirmed; AAAsf; RO:Sta ----B AU3FN0026019; Long Term Rating; Affirmed; AA+sf; RO:Sta ----C AU3FN0026027; Long Term Rating; Affirmed; AAsf; RO:Sta TORRENS Series 2017-1 Trust ----A1 AU3FN0034823; Long Term Rating; Affirmed; AAAsf; RO:Sta ----A2 AU3FN0034831; Long Term Rating; Affirmed; AAAsf; RO:Sta ----AB AU3FN0034849; Long Term Rating; Affirmed; AAAsf; RO:Sta ----B AU3FN0034856; Long Term Rating; Affirmed; AA+sf; RO:Sta ----C AU3FN0034864; Long Term Rating; Upgrade; A+sf; RO:Sta TORRENS Series 2017-3 Trust ----A AU3FN0037438; Long Term Rating; Affirmed; AAAsf; RO:Sta ----AB AU3FN0037446; Long Term Rating; Affirmed; AAAsf; RO:Sta KEY RATING DRIVERS Coronavirus Related Economic Shock: Fitch has made assumptions about the spread of the coronavirus and the economic impact of the related containment measures. As a base-case (most likely) scenario, Fitch assumes a global recession in 1H20, driven by sharp economic contractions in major economies with a rapid spike in unemployment, followed by a recovery that begins in 3Q20 as the health crisis subsides. Containment Measures Hurting Economy: The measures put in place to limit the virus spread are affecting Australia's economy, with many businesses temporarily shut down with little or no income. We expect these measures to affect mortgage performance, but there should be no rating impact on the rated notes, as the ratings can absorb Fitch's base-case scenario of the pandemic. Liquidity Risk from Payment Holidays: We have reviewed the ability of transactions to survive a significant proportion of borrowers being offered and taking up a payment holiday. The transactions have basis and fixed-rate swaps that will pay the trust the bank-bill swap rate plus the weighted-average (WA) margin on all notes plus a fixed margin (being greater than the senior expenses under each trust). We do not expect any draws on liquidity support while the swaps are in place. The transactions also benefit from liquidity facilities sized between 0.85% and 1.3% of the outstanding asset balance and excess revenue reserves, which would be able to cover at least 86.0% of the portfolio having a payment holiday for six months, assuming the remaining 14.0% pays on interest-only terms and there are no principal collections; that is, a conditional pre-payment rate of zero. Asset Analysis: The asset model was not re-run for TORRENS Series 2014-1 Trust, TORRENS Series 2017-2(P) Trust, TORRENS Series 2017-3 Trust, TORRENS Series 2019-1 Trust or TORRENS Series 2019-2 Trust, in accordance with Fitch's criteria. The 'AAAsf' WA foreclosure frequency for TORRENS Series 2014-2 Trust and 2017-1 decreased from the last review to 9.7% and 8.5%, respectively. The 'AAAsf' lenders' mortgage insurance (LMI) dependent WA recovery rates are 87.6% and 85.3%, respectively. For all seven transactions, arrears balances have been stable since the last rating action. Arrears percentages have increased for most transactions as a result of asset amortisation and newly issued transactions starting to see arrears; at end-2019, 30+ day arrears of four transactions tracked above Fitch's 4Q19 Dinkum RMBS Index of 1.06%, while the other three performed better. Of the four transactions, 30+ day arrears ranged between 1.58% (2014-2) and 3.12% (2014-1). BEN has advised that hardship loans are included in the arrears figures for all transactions and that 2014-1 had the largest portion of hardship loans at 1.49%. Torrens 2014-1, 2014-2, 2017-1 and 2017-2(P) had one or two losses since closing, while there are no losses for the other three transactions. Losses were covered either by LMI or excess spread. Liability Analysis: Cash flow analysis was not performed for any of the transactions, except for 2014-2 and 2017-1, as all rated notes are rated at the highest possible level; cash flow distribution has been within our expectations since the last cash flow model analysis and there have been no material changes to cash flow assumptions. TORRENS 2014-2's class A, AB, B and C notes benefit from credit enhancement of 16.4%, 4.7%, 1.8% and 1.0%, respectively. Structural features include an excess revenue reserve that has trapped AUD1.5 million and a liquidity facility sized at 1.3% of the outstanding asset balance, with a facility floor of around AUD779,000. The class A and AB notes can withstand all relevant Fitch 'AAAsf' stresses applied in our cash-flow analysis, the class B notes can withstand all of Fitch's 'AA+sf' stresses and the class C notes can withstand all of Fitch's 'AAsf' stresses. TORRENS 2017-1's class A1, A2, AB, B and C notes benefit from current credit enhancement of 13.1%, 10.0%, 5.5%, 2.6% and 1.1%, respectively. Structural features include an excess revenue reserve that has trapped AUD2.1 million and a liquidity facility sized at 0.85% of the outstanding asset balance, with a facility floor of around AUD719,000. The class A1, A2, AB and B notes can withstand all relevant Fitch 'AAAsf' stresses applied in our cash-flow analysis, and the class C notes can withstand all of Fitch's 'AAsf' stresses. Class B and C are, however, constrained by concentration at 'AA+sf' and 'A+sf', respectively. Operational Risk: BEN is an authorised deposit-taking institution that has its headquarters in Bendigo. Fitch undertook an onsite operational review and found that the operations of the servicer were comparable with market standards and that there were no material changes that may affect BEN's ongoing ability to undertake administration and collection activities. BEN's collection timelines, policies and procedures are in line with those of other conforming lenders in Australia, as evident from the historical performance of TORRENS transactions. At the time of rating action, there has been no disruption to servicing, as collections staff is working remotely. Macroeconomic Factors: Fitch expects mortgage performance to deteriorate in the near term, but to continue to support the Stable Outlook for the notes. Fitch forecasts economic decline in Australia of 2.2% for 2020, with unemployment to increase to 7.7%. This is to be partially offset by a low cash rate of 0.25% and the application of both central bank and government stimulus measures. Fitch expects GDP growth to bounce back to 2.9% in 2021 and for the unemployment rate to fall to 6.9% in the medium term. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: All the classes in 2014-1, 2017-2(P), 2017-3, 2019-1 and 2019-2 are rated at 'AAAsf', which is the highest level on Fitch's scale. The ratings cannot be upgraded. The models of 2014-2 and 2017-1 were run under two 'up' scenarios. In both the first scenario (15% decrease in defaults and 15% increase in recoveries) and second (LMI 1 notch upgrade), the class C of 2014-2 will have a one-notch upgrade, while other classes maintain the current ratings. As for 2017-1, these two 'up' sensitivity scenario results are both above or equal to the rating determined by concentration tests, so that there is no upgrade for notes in 2017-1 under the 'up' sensitivity tests. Factors that could, individually or collectively, lead to negative rating action/downgrade: Downgrades may occur if the built up of credit enhancement does not compensate for higher losses than our expectations due to greater levels of defaults and portfolio deterioration. The ratings of all class A notes across all seven transactions and the AB notes for 2017-3 are LMI independent and therefore are unaffected by downgrades in the LMI providers' ratings. The remaining rated notes are LMI dependent and therefore sensitive to downgrades of the LMI providers' ratings. The ratings of class AB, B and C notes from 2014-2 can withstand the downgrade of LMI providers' ratings by 2, 1 and 1 notches, respectively. The ratings of class AB, B and C from 2017-1 can withstand the downgrade of LMI providers' ratings by 3, 1 and 2 notches, respectively. Fitch conducted sensitivity analysis on 2014-2 and 2017-1 by stressing the transactions' base-case assumptions. The results of rating sensitivity testing are shown below. Fitch applies the recovery rate stress to the pre-LMI recovery rate to isolate the effect of a change in recovery proceeds at the borrower level. TORRENS 2014-2 Notes: A / AB / B / C Rating: AAAsf / AAAsf / AA+sf / AAsf Rating sensitivity to increased defaults: Increase defaults by 15%: AAAsf / AAAsf / AA+sf / AAsf Increase defaults by 30%: AAAsf / AAAsf / AAsf / AAsf Rating sensitivity to decreased recoveries: Reduce recoveries by 15%: AAAsf / AAAsf / AAsf / AA-sf Reduce recoveries by 30%: AAAsf / AA+sf / AAsf / A+sf Rating sensitivity to multiple factors: Increase defaults by 15%, reduce recoveries by 15%: AAAsf / AA+sf / AAsf / AA-sf Increase defaults by 30%, reduce recoveries by 30%: AAAsf / AAsf / AA-sf / A+sf TORRENS 2017-1 Notes: A1/A2 / AB / B / C Rating: AAAsf / AAAsf / AA+sf / A+sf Rating sensitivity to increased defaults: Increase defaults by 15%: AAAsf / AAAsf / AA+sf / A+sf Increase defaults by 30%: AAAsf / AAAsf / AA+sf / A+sf Rating sensitivity to decreased recoveries: Reduce recoveries by 15%: AAAsf / AAAsf / AA+sf / A+sf Reduce recoveries by 30%: AAAsf / AA+sf / AA+sf / A+sf Rating sensitivity to multiple factors: Increase defaults by 15%, reduce recoveries by 15%: AAAsf / AAAsf / AA+sf / A+sf Increase defaults by 30%, reduce recoveries by 30%: AAAsf / AA+sf / AAsf / A+sf The ratings of 2017-1's class B and C notes are constrained by concentration tests to 'AA+sf' and 'A+sf', respectively. This section provides insight into the model-implied sensitivities the transaction faces when one assumption - WA foreclosure frequency and/or WA recovery rate − is stressed, while holding others equal. The modelling process uses the estimation and stress of default and loss assumptions to reflect asset performance in a stressed environment. The results above should only be considered as one potential outcome, as the transaction is exposed to multiple dynamic risk factors. Fitch's initial rating sensitivities were discussed in the new issue reports or presale reports of TORRENS transactions. Best/Worst Case Rating Scenario Ratings of structured finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit www.fitchratings.com/site/re/10111579 USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio or conducted a review of origination files as part of its ongoing monitoring. Prior to 2014-1 and 2014-2's closing, Fitch did not review the results of a third-party assessment conducted on the asset portfolio information. Prior to 2017-1, 2017-2(P), 2017-3, 2019-1 and 2019-2's closing, Fitch sought to receive a third-party assessment conducted on the asset portfolio information, but none was available for these transactions. As part of its ongoing monitoring, Fitch reviewed a small targeted sample of BEN's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. SOURCES OF INFORMATION The information below was used in the analysis: Loan-by-loan data provided by BEN as of end-January 2020 Transaction reporting data provided by BEN as of end-January 2020 Discussions with and updates from BEN in February and March 2020 REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria listed below. In addition, the following sources of information, which are not discussed in the criteria, were used: As described in Sources of Information above. The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public. ESG Considerations ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg. Contacts: Surveillance Rating Analyst Eugene Wang, Senior Analyst +61 2 8256 0373 Fitch Australia Pty Ltd Level 15 77 King Street Sydney NSW 2000 Surveillance Rating Analyst Bradley Isaac, Senior Analyst +61 2 8256 0306 Fitch Australia Pty Ltd Level 15 77 King Street Sydney NSW 2000 Committee Chairperson Natasha Vojvodic, Senior Director +61 2 8256 0350
Media Relations: Peter Hoflich, Singapore, Tel: +65 6796 7229, Email: peter.hoflich@thefitchgroup.com; Leslie Tan, Singapore, Tel: +65 6796 7234, Email: leslie.tan@thefitchgroup.com. Additional information is available on www.fitchratings.com Applicable Criteria APAC Residential Mortgage Rating Criteria (pub. 04 Jun 2019) (including rating assumption sensitivity) https://www.fitchratings.com/site/re/10076316 Fitch Ratings Interest Rate Stress Assumptions for Structured Finance and Covered Bonds (Excel) (pub. 06 Dec 2019) https://www.fitchratings.com/site/re/10104368 Global Structured Finance Rating Criteria (pub. 02 May 2019) (including rating assumption sensitivity) https://www.fitchratings.com/site/re/10073280 RMBS Lenders' Mortgage Insurance Rating Criteria (pub. 12 Mar 2020) (including rating assumption sensitivity) https://www.fitchratings.com/site/re/10110807 Structured Finance and Covered Bonds Counterparty Rating Criteria (pub. 29 Jan 2020) https://www.fitchratings.com/site/re/10108544 Structured Finance and Covered Bonds Counterparty Rating Criteria: Derivative Addendum (pub. 29 Jan 2020) https://www.fitchratings.com/site/re/10108546 Structured Finance and Covered Bonds Interest Rate Stresses Rating Criteria (pub. 06 Dec 2019) https://www.fitchratings.com/site/re/10103887 Applicable Model Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s). Multi-Asset Cash Flow Model, v2.5.0 1-https://www.fitchratings.com/site/re/952504 ResiGlobal Model: Australia, v1.59.3 1-https://www.fitchratings.com/site/re/952504 Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/site/dodd-frank-disclosure/10116422 Solicitation Status https://www.fitchratings.com/site/pr/10116422#solicitation Endorsement Status https://www.fitchratings.com/site/pr/10116422#endorsement_status Endorsement Policy https://www.fitchratings.com/regulatory ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, THE FOLLOWING https://www.fitchratings.com/site/dam/jcr:6b03c4cd-611d-47ec-b8f1-183c01b51b08/R ating%20Definitions%20-%203%20May%202019%20v3%206-11-19.pdf DETAILS FITCH'S RATING DEFINITIONS FOR EACH RATING SCALE AND RATING CATEGORIES, INCLUDING DEFINITIONS RELATING TO DEFAULT. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT HTTPS://WWW.FITCHRATINGS.COM/SITE/REGULATORY. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2020 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001 Fitch Ratings, Inc. is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (the "NRSRO"). While certain of the NRSRO's credit rating subsidiaries are listed on Item 3 of Form NRSRO and as such are authorized to issue credit ratings on behalf of the NRSRO (see https://www.fitchratings.com/site/regulatory), other credit rating subsidiaries are not listed on Form NRSRO (the "non-NRSROs") and therefore credit ratings issued by those subsidiaries are not issued on behalf of the NRSRO. However, non-NRSRO personnel may participate in determining credit ratings issued by or on behalf of the NRSRO.