(The following statement was released by the rating agency) Fitch Ratings-Sydney-December 19: Fitch Ratings has affirmed the ratings of 45 note classes from 18 Firstmac RMBS transactions. All transactions are backed by pools of conforming Australian residential mortgages sourced directly or through third-party introducers. The mortgages were originated in the name of nominee companies on behalf of the trustee, Firstmac Fiduciary Services Pty Ltd, and sold to various trusts from Firstmac warehouses. A full list of rating actions follows at the end of this ratings action commentary. KEY RATING DRIVERS Operational Risk: Firstmac, established in 1988, is a non-bank lender with extensive experience in originating, servicing and managing its mortgage portfolio. Fitch undertook an onsite operational review and found that the operations of the servicer, including origination practices, timelines, policies and procedures relating to mortgage collection, were comparable with market standards for conforming mortgages, as evident from the historical performance of its RMBS transactions. We do not foresee any significant changes that may affect Firstmac's ongoing ability to undertake administration and collection activities.
Asset Analysis: The asset model was not re-run for the transaction in accordance with Fitch's criteria, as the notes are rated at the highest possible level, asset composition and performance have not deteriorated materially since the last asset model analysis; and there have been no material changes to asset assumptions since the last asset model analysis. Two transactions had 30+ day arrears above the Fitch's 3Q18 Dinkum RMBS Index of 1.04% at end-October 2018, while three transactions had 90+ day arrears about the Dinkum Index of 0.53%. FirstMac Mortgage Funding Trust Series 1-2012 had the highest level of 30+ day arrears, at 1.97%, while Firstmac Mortgage Funding Trust No.4 Series 1-2018 recorded the lowest level, at zero arrears. We expect arrears as a percentage for more seasoned transactions to increase due to the small size of the pools, while arrears by balance remain low and stable. Performance has been strong, with low loss levels that have been covered by lenders' mortgage insurance (LMI) and excess spread. Liability Analysis: Cash flow analysis was not performed for the transactions as all rated notes are rated at the highest possible level, cash flow distributions have been within Fitch's expectations and there have been no material changes to cash flow assumptions since the last cash flow model analysis. Class A notes initially receive principal in set proportions, with the remaining classes receiving principal sequentially prior to pro rata test conditions being met. Once met, principal is allocated on a pro rata basis across all notes, except the most junior notes and notes from Firstmac Mortgage Funding Trust Series 1E-2013 and Firstmac Mortgage Funding Trust Series 2E-2013, which will receive no principal allocation until all other notes are repaid in full, increasing credit enhancement. Structural features include liquidity reserves and facilities, spread reserves and junior spread reserves. Macroeconomic Factors: Fitch expects stable mortgage performance, supported by sustained economic expansion in Australia. The economic outlook is driven by steady forecast GDP growth of 2.8% and one 25bp cash rate increase in 2019. All transactions have significant loan concentrations in Queensland and our macroeconomic outlook for Queensland is stable, with gross state product expected to strengthen by 3.0% in the financial year ending June 2019. RATING SENSITIVITIES Fitch does not expect the ratings to be affected by any foreseeable change in performance. The prospect of downgrade is remote in light of the subordination level of the rated notes, pool performance, adequate excess spread and Fitch's stable expected economic outlook for Australia and, in particular, Queensland. The ratings are independent of downgrades in the LMI providers' ratings for all transactions, except for the class AB notes from FirstMac Mortgage Funding Trust Series 3-2012 and 1E-2013, which remain sensitive to downgrades in the LMI providers' ratings. 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 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 as part of its ongoing monitoring. As part of its ongoing monitoring, Fitch reviewed a small targeted sample of Firstmac's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and 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 Firstmac as at October 2018 Transaction reporting data provided by Firstmac as at October 2018 Loan enforcement details provided by Firstmac as at October 2018 The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public. The full list of rating actions is shown below (as at October 2018 reports): FirstMac Mortgage Funding Trust Series 2-2011: AUD58.2 million Class A-3 notes affirmed at 'AAAsf'; Outlook Stable; and AUD5.0 million Class AB notes affirmed at 'AAAsf'; Outlook Stable. FirstMac Mortgage Funding Trust Series 1-2012: AUD47.9 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable; and AUD5.0 million Class AB notes affirmed at 'AAAsf'; Outlook Stable. FirstMac Mortgage Funding Trust Series 3-2012: AUD23.4 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; AUD73.0 million Class A-2R notes affirmed at 'AAAsf'; Outlook Stable; and AUD8.4 million Class AB notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust Series 1E-2013: AUD39.5 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; AUD83.9 million Class A-2R notes affirmed at 'AAAsf'; Outlook Stable; and AUD11.9 million Class AB notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust Series 2E-2013: AUD16.3 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD87.4 million Class A-2R notes affirmed at 'AAAsf'; Outlook Stable. FirstMac Mortgage Funding Trust No. 4 Series 1A-2014: AUD36.1 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; AUD155.2 million Class A-2R notes affirmed at 'AAAsf'; Outlook Stable; and AUD7.3 million Class A-3 notes affirmed at ' AAAsf '; Outlook Stable. Firstmac Mortgage Funding Trust No.4 Series 2-2014: AUD69.7 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; AUD118.4 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable; and AUD9.3 million Class A-3 notes affirmed at 'AAAsf'; Outlook Stable. FIRSTMAC MORTGAGE FUNDING TRUST NO. 4 SERIES 3PP-2014 AUD208.2 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD12.2 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 1-2015: AUD185.9 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; AUD149.3 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable; and AUD15.0 million Class A-3 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No.4 Series 2-2015: AUD163.6 million Class A-1a notes affirmed at 'AAAsf'; Outlook Stable; AUD25.0 million Class A-1b notes affirmed at 'AAAsf'; Outlook Stable; AUD0.0 million Class A-1R notes affirmed at 'AAAsf'; Outlook Stable; and AUD13.9 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 2-2016: AUD196.7 million Class A-1a notes affirmed at 'AAAsf'; Outlook Stable; AUD10.8 million Class A-1b notes affirmed at 'AAAsf'; Outlook Stable; and AUD22.5 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 3-2016: AUD288.1 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD30.3 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 1-2017: AUD923.0 million Class A1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD91.8 million Class A2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 2-2017: AUD615.2 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD60.2 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 3-2017: AUD394.2 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD25.2million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No.4 Series 1-2018: USD141.1 million Class A1-U notes affirmed at 'AAAsf'; Outlook Stable; AUD158.4 million Class A1-A notes affirmed at 'AAAsf'; Outlook Stable; and AUD78.0 million Class A1-B notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 2-2018: AUD750.9 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD65.9 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Firstmac Mortgage Funding Trust No. 4 Series 3-2018: AUD850.0 million Class A-1 notes affirmed at 'AAAsf'; Outlook Stable; and AUD70.0 million Class A-2 notes affirmed at 'AAAsf'; Outlook Stable. Contacts: Lead Surveillance Analyst Hai Duong Le Associate Director +61 2 8256 0358 Fitch Australia Pty Ltd Level 15, 77 King Street, Sydney NSW 2000 Committee Chairperson Claire Heaton Senior Director +61 2 8256 0361 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. 22 Oct 2018) https://www.fitchratings.com/site/re/10046448 Global Structured Finance Rating Criteria (pub. 15 May 2018) https://www.fitchratings.com/site/re/10029600 RMBS Lenders' Mortgage Insurance Rating Criteria (pub. 03 Apr 2018) https://www.fitchratings.com/site/re/10025397 Structured Finance and Covered Bonds Counterparty Rating Criteria (pub. 01 Aug 2018) https://www.fitchratings.com/site/re/10039504 Structured Finance and Covered Bonds Counterparty Rating Criteria: Derivative Addendum (pub. 01 Aug 2018) https://www.fitchratings.com/site/re/10039505 Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/site/dodd-frank-disclosure/10056633 Solicitation Status https://www.fitchratings.com/site/pr/10056633#solicitation 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, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. 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 © 2018 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.