(The following statement was released by the rating agency) SYDNEY, August 22 (Fitch)
Fitch Ratings has assigned final ratings to Series 2013-1 REDS Trust's class A2R mortgage-backed floating-rate notes.
The ratings are as follows:AUD170m Class A2R notes: 'AAAsf'; Outlook StableThe class A2R notes were issued to refinance the soft-bullet class A2 notes on 22 August 2016. The class A2 notes were repaid in full from the issuance of the class A2R notes, as the principal reserve balance was zero. The class A2 notes were originally issued in August 2013 as part of an AUD850m RMBS issue by Bank of Queensland.
The notes' refinancing was contemplated in the original issuance. The transaction continues to perform in line with Fitch's expectations at origination and has paid down from AUD850m to approximately AUD423m since issuance.Ratings for the remaining rated notes are unchanged and were affirmed on 22 February 2016 as follows (note balances as at January 2016):AUD244.4m Class A1 (ISIN AU0000RDIHA7) 'AAAsf'; Outlook Stable; The class A2R notes are issued by Perpetual Trustee Company Limited in its capacity as trustee of Series 2013-1 REDS Trust.
KEY RATING DRIVERS
The 'AAAsf' rating assigned to the class A2R notes is supported by the credit enhancement provided by the subordinate class AB, B1 and B2 notes; the liquidity facility, which is equivalent to 1.9% of the outstanding note balance; and Bank of Queensland's mortgage underwriting and servicing capabilities.
RATING SENSITIVITIES
The class A2R notes are independent of lenders' mortgage insurance. Unexpected decreases in residential property value, increases in the frequency of foreclosures and loss severity on defaulted mortgages could produce loss levels higher than Fitch's base-case, which could in turn result in negative rating action on the notes.
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.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by accessing the appendix referenced under "Related Research" below. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled "Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions," dated 26 March 2015.
DATA ADEQUACY
Fitch conducted a file review of 10 sample loan files focusing on the underwriting procedures conducted by Bank of Queensland 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.
Contacts: Primary Analyst Courtney Miller Associate Director+612 8256 0347Fitch Australia Pty Ltd.Level 15, 77 King St, Sydney, NSW 2000 Secondary Analyst David Carroll Director+612 8256 0333 Committee Chairperson Natasha Vojvodic Senior Director+612 8256 0350
Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com.Additional information is available at www.fitchratings.com.The source of information identified for this rating action was Bank of Queensland. 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. 28 Jul 2016)https://www.fitchratings.com/site/re/884215Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)https://www.fitchratings.com/site/re/884963Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 18 Jul 2016) https://www.fitchratings.com/site/re/884964
Global Criteria for Lenders’ Mortgage Insurance in RMBS (pub. 28 Jul 2016)https://www.fitchratings.com/site/re/884107Global Structured Finance Rating Criteria (pub. 27 Jun 2016)https://www.fitchratings.com/site/re/883130Related Research Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions (Applicable to Transactions Rated from Sept.26, 2011 until June 15, 2015) https://www.fitchratings.com/site/re/863817Series 2013-1 REDS Trust - Appendix https://www.fitchratings.com/site/re/715666Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr _id=1010622Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1010622Endorsement 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 PUBLIC WEBSITE '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.