Powered by MOMENTUM MEDIA
subscribe to our newsletter
ME receives Aaa credit rating for RMBS deal

ME receives Aaa credit rating for RMBS deal

Industry super fund-owned bank ME has been assigned an Aaa credit rating for its first transaction of residential mortgage-backed securities in 2015.

Moody’s Investors Service assigned the long-term provisional rating to the $460 million transaction – a securitisation of a portfolio of Australian prime residential mortgages originated by ME, with rate notes to be issued by its trustee, Perpetual Limited.

The credit ratings agency said 68 per cent of the loans in the portfolio benefit from LMI policies covering losses up to 100 per cent of the principal amount, the accrued interest of each loan and reasonable expenses involved in enforcing the mortgage.

Advertisement
Advertisement

Moody’s said the rating also takes into account other factors, including: “A liquidity facility provided by ME, with a required limit equal to 1.00 per cent of the aggregate outstanding balance of the mortgage loans”; the threshold rate; a fixed-rate swap provided by ANZ "to hedge any mismatch between the interest rates charges on the fixed-rate loans and payable on the floating rate notes"; and ME’s experience in servicing residential mortgage portfolios.

“ME currently has 20 active public securitisation transactions, which highlights ME’s experience as a manager and servicer of securitised transactions,” it said in a statement.

Moody’s added that one factor that could lead to a downgrade of ME’s rating is a “worse-than-expected collateral performance”.

“Other reasons for worse performance than Moody’s expects include poor servicing, error on the part of transaction parties, a deterioration in credit quality of transaction counterparties, lack of transactional governance and fraud.”

ME receives Aaa credit rating for RMBS deal
mortgagebusiness

 

Latest News

ASIC is determined to flex its muscles, with a bill designed to enhance its enforcement powers one step closer to law.  ...

Treasurer Josh Frydenberg has told the banks and regulators that they will face an inquiry down the track to ensure they have lifted their g...

A CEO has welcomed the introduction of legislation that would “remove a handbrake” that has held back customer-owned banks from competin...

FROM THE WEB

POST RC PANEL DISCUSSION ADDED

podcast

LATEST PODCAST: The current mindset of the mortgage industry

Is enough being done to ensure responsible lending?