(The following statement was released by the rating agency) Fitch Ratings-Sydney-August 17: Fitch Ratings has affirmed 17 note classes from eight APOLLO RMBS transactions. The transactions are Australian conforming residential mortgages originated by Suncorp-Metway Limited (A+/Stable). The notes were issued by Perpetual Trustee Company Limited in its capacity as trustee of the series. A full list of rating actions follows at the end of this ratings action commentary. KEY RATING DRIVERS Macroeconomic Factors: Fitch expects stable mortgage performance, supported by sustained economic growth in Australia that is driven by stable forecast GDP growth of 2.7% in 2019 and no significant change to the official cash rate. All the pools have concentration in Queensland. Asset Analysis: The asset model for this annual review was not run, as the transactions do not have revolving periods, the outstanding ratings are only 'AAAsf' and a rated junior note is present with no subordination, the review of pre-determined performance triggers indicates the transactions display stable asset performance and there have been no significant changes to transaction structures. As at end-June 2018, 30+day arrears ranged from 0.22% for APOLLO Series 2018-1 Trust and to 2.29% for APOLLO Series 2009-1 Trust, while 90+day arrears ranged between 0.00% for APOLLO 2018-1 and 1.48% for APOLLO Series 2015-1 Trust. The transactions had 30+day arrears above Fitch's 1Q18 Dinkum RMBS Index of 1.13%, except APOLLO Series 2017-1 Trust, APOLLO Series 2017-2 Trust and APOLLO 2018-1. Though arrears have been higher than the Dinkum index, losses have remained low, with APOLLO 2017-1, APOLLO 2017-2 and APOLLO 2018-1 having had no losses since closing. Losses on the underlying mortgages in the pool have been covered primarily by the lenders' mortgage insurance (LMI) provider, QBE Lenders' Mortgage Insurance Limited (Insurer Financial Strength Rating: AA-/Stable); the average payout ratio has been 87%. Remaining losses were covered by excess spread. The weighted-average loan/value ratio ranged between 51.3% for APOLLO Series 2009-1 Trust and 61.7% for APOLLO 2017-1. Each pool is geographically concentrated in Queensland, which has been taken into account in our analysis. The affirmation of the APOLLO 2009-1 class B note is based on transaction performance to date, with low levels of arrears and losses. The LMI provider continues to pay a significant portion of submitted claims and all shortfalls have been covered by excess spread. Fitch expects the transaction to be large in size - at least AUD140 million - at call and have annualised excess spread of at least 0.5%. Net excess spread should be adequate and stable for the transaction's remaining life and sufficient to cover principal shortfalls from LMI reductions or denials. Cash Flow Analysis: The cash flow model was not run in line with our APAC Residential Mortgage Rating Criteria, as there have been no changes to the transaction structure or asset performance. Operational Risk: Suncorp-Metway Limited is an authorised deposit-taking institution, with a history dating back to 1902. Fitch undertook an onsite operational review and found that the operations of the originator and servicer were comparable with other conforming lenders. RATING SENSITIVITIES Fitch does not expect the ratings to be affected by any foreseeable change in performance. The ratings of the 'AAAsf' rated notes are LMI-independent and therefore not sensitive to downgrades to the LMI providers' ratings.
The Apollo 2009-1 class B note, rated 'BBBsf', may be downgraded if there is deterioration in performance, as reflected by losses above expectations, a significant reduction in payment of LMI claims or a large fall in excess spread. 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 Suncorp-Metway Limited's origination files and found the information contained in the 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 Suncorp-Metway Limited as at 30 June 2018. Transaction reporting data provided by Suncorp-Metway Limited as at 30 June 2018. Loan enforcement details provided by Suncorp-Metway Limited as at 30 June 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 (balances as at July 2018 payment date): APOLLO Series 2009-1 Trust AUD35.2 million Class A3 (ISIN AU3FN0008967) notes affirmed at 'AAAsf'; Outlook Stable AUD147.8 million Class B (ISIN AU3FN0008975) notes affirmed at 'BBBsf'; Outlook Stable APOLLO Series 2011-1 Trust AUD100.2 million Class A1 (ISIN AU3FN0014502) notes affirmed at 'AAAsf'; Outlook Stable AUD92 million Class A2 (ISIN AU3FN0014510) notes affirmed at 'AAAsf'; Outlook Stable AUD23.9 million Class AB (ISIN AU3FN0014528) notes affirmed at 'AAAsf'; Outlook Stable APOLLO Series 2012-1 Trust AUD197.1 million Class A1 (ISIN AU3FN0016515) notes affirmed at 'AAAsf'; Outlook Stable AUD23.9 million Class AB (ISIN AU3FN0016523) notes affirmed at 'AAAsf'; Outlook Stable APOLLO Series 2013-1 Trust AUD260.5 million Class A (ISIN AU0000AORHA1) notes affirmed at 'AAAsf'; Outlook Stable APOLLO Series 2015-1 Trust AUD455.2 million Class A (ISIN AU3FN0026548) notes affirmed at 'AAAsf'; Outlook Stable APOLLO Series 2017-1 Trust AUD770.2 million Class A (ISIN AU3FN0034237) notes affirmed at 'AAAsf'; Outlook Stable AUD48.1 million Class AB (ISIN AU3FN0034245) notes affirmed at 'AAAsf'; Outlook Stable APOLLO Series 2017-2 Trust AUD1,112.2 million Class A1 (ISIN AU3FN0038030) notes affirmed at 'AAAsf'; Outlook Stable AUD24.2 million Class A2 (ISIN AU3FN0038048) notes affirmed at 'AAAsf'; Outlook Stable AUD32.3 million Class AB (ISIN AU3FN0038055) notes affirmed at 'AAAsf'; Outlook Stable APOLLO Series 2018-1 Trust AUD1,094.1 million Class A1 (ISIN AU3FN0042057) notes affirmed at 'AAAsf'; Outlook Stable AUD46.3 million Class A2 (ISIN AU3FN0042065) notes affirmed at 'AAAsf'; Outlook Stable AUD8.8 million Class AB (ISIN AU3FN0042073) 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 St, Sydney NSW 2000 Committee Chairperson Atsushi Kuroda Senior Director +81 3 3288 2692 Media Relations: Leslie Tan, Singapore, Tel: +65 6796 7234 , Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria APAC Residential Mortgage Rating Criteria (pub. 14 Jul 2017) https://www.fitchratings.com/site/re/901072 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/10041631 Solicitation Status https://www.fitchratings.com/site/pr/10041631#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.