Fitch Affirms GBS Receivables Trust No.4 at 'AAAsf', Outlook Stable

(The following statement was released by the rating agency)SYDNEY, February 04 (Fitch) Fitch Ratings has affirmed the ratings for GBS Receivables Trust No.4's Class A1 and A2 notes. The transaction is a securitisation of Australian conforming residential mortgages originated by Greater Building Society Ltd (GBS). The rating action is as follows:AUD 40.8m Class A1 (ISIN AU3FN0009015) notes affirmed at 'AAAsf', Outlook Stable; andAUD 5.5m Class A2 (ISIN AU3FN0009023) notes affirmed at 'AAAsf', Outlook StableThe notes are issued by Permanent Custodians Limited in its capacity as trustee of GBS Receivables Trust No.4.KEY RATING DRIVERSThe affirmations reflect Fitch's view that the available credit enhancement is sufficient to support the notes' current ratings, and can withstand deterioration from the current economic conditions in Australia in line with the agency's expectations. The credit quality and performance of the loans in the collateral pools have also remained in line with expectations.As of December 2015, 30+ days arrears were 0.26%, well below Fitch's 3Q15 Dinkum RMBS Prime Index of 0.91%. Lender's mortgage insurance (LMI) covers 100% of the pool; 70% Genworth Financial (N:GNW) Mortgage Insurance Pty Limited (Insurer Financial Strength Rating A+/Stable) and 30% QBE Lender's Mortgage Insurance Ltd (Insurer Financial Strength Rating AA-/Stable). The transaction has experienced no losses to date.The pro-rata pay-down was triggered prematurely in July 2015 when the available subordination to the Class A1 notes was 18.6%. GBS has advised us the transaction will resume sequential payments in March 2016 until the available subordination for the Class A notes reach above 19%.RATING SENSITIVITIES The initial sequential pay-down has resulted in a build-up of credit enhancement levels for the rated notes. Both Class A1 and A2 notes are independent of downgrades to the LMI provider's ratings. At Fitch's 'AAAsf', the breakeven default rate is 6.37%. The Class A1 notes can withstand an additional 92.3% defaults while the Class AB notes can withstand an additional 33.4% defaults at Fitch's 'AAAsf' loss severity.DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action.DATA ADEQUACY Fitch conducted a file review of 10 sample loan files focusing on the underwriting procedures conducted by GBS compared to its credit policy at the time of underwriting. Fitch has checked the consistency and plausibility of the information and no material discrepancies were noted that would impact Fitch's rating analysis.A comparison of the transaction's representations, warranties and enforcement mechanisms (RW&Es) to those of typical RW&Es for this asset class is available by accessing the reports and/or links given under Related Research below.Contacts: Lead Surveillance Analyst Hai Duong LeAssociate DirectorPhone +612 8256 0358 Fitch Australia Pty Ltd., Level 15, 77 King St, Sydney, NSW 2000Committee Chairperson Natasha Vojvodic Senior Director +61 2 8256 0350Media Relations: Leni Vu, Sydney, Tel: +61 2 8256 0304, Email: leni.vu@fitchratings.com.Additional information is available at www.fitchratings.com.Sources of Information:The source of information used to assess these ratings were provided by Greater Building Society Ltd. The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public.Applicable Criteria APAC Residential Mortgage Criteria (pub. 23 Jun 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867437Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 14 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744175Global Criteria for Lenders’ Mortgage Insurance in RMBS (pub. 23 Jun 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=865195Global Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952Related Research GBS Receivables Trust No.4 (Australia RMBS) https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=465650Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr _id=999102Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999102Endorsement Policy https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&det ail=31ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S FREE 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. 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. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises 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.