Fitch Downgrades 2 Notes from Interstar Millennium Series 2005-3E Trust; Affirms 1

(The following statement was released by the rating agency)SYDNEY, December 15 (Fitch) Fitch Ratings has downgraded two notes and affirmed one issued under Interstar Millennium Series 2005-3E Trust. All have been removed from Rating Watch Negative (RWN), where they were placed on 19 June 2015 following the downgrade of The Royal Bank of Scotland (L:RBS) plc (RBS, BBB+/Stable/F2) on 19 May 2015. RBS is a currency swap provider for the transaction, which is a securitisation of Australian conforming residential mortgages originated through a network of mortgage originators and brokers under the Interstar Millennium Trust Securitisation programmes. The rating actions are as listed below: GBP39.8m notes Class A2 (ISIN XS0232803709) downgraded to 'Asf' from 'AAAsf'; off RWN; Outlook Stable;AUD37.0m notes Class AB (ISIN AU300INTD010) downgraded to 'Asf' from 'AAAsf'; off RWN; Outlook Stable; andAUD44.5m notes Class B (ISIN AU300INTD028) affirmed at 'Bsf'; off RWN; Outlook Stable.KEY RATING DRIVERSRBS has been collateralising in accordance with the transaction documents, which reflected Fitch's counterparty criteria at the time of the transaction's closing. Fitch always applies its current criteria in assessing transactions. Discussions between RBS and the trust manager in relation to collateralising in accordance with Fitch's current counterparty criteria have, however, resulted in the decision to take no further action, so the current documentation remains.Fitch has assessed that the gap in collateralisation between the two criteria is materially significant and will cap the ratings of the notes at 'Asf', in accordance with the minimum derivative counterparty ratings under Fitch's current criteria. Credit has been given to RBS as a 'BBB+' rated entity. The affirmation of the Class B notes reflects the credit given to RBS as a currency swap provider and the fact that the current rating of Class B notes is lower than the rating of RBS. RATING SENSITIVITIESAny change in the rating of RBS is expected to impact the rating of the Class A2 and AB notes, as the creditworthiness of RBS is a key hedge of currency risk in the transaction.DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating actionDATA ADEQUACY Fitch conducted a file review of 10 sample loan files focusing on the underwriting procedures conducted by Advantedge 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: Lead Surveillance Analyst James ZanesiDirectorPhone +61 2 8256 0306Fitch Australia Pty Ltd., Level 15, 77 King St, Sydney, NSW 2000Committee Chairperson Natasha VojvodicSenior 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 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=867952Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr _id=996719Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=996719Endorsement 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.