Resimac RMBS assigned AAA credit ratings

Standard & Poor’s (S&P) has assigned fresh ratings to three classes of prime residential mortgage-backed securities originated by Resimac.

The Resimac Triomphe Trust – Resimac Premier Series 2015-1 included $450 million worth of Class A notes and $30 million worth of Class AB notes, with both classes receiving an AAA rating, while its Class B2 notes worth $17.5 million were assigned an A+ rating.

S&P said its ratings reflect its view on factors including the credit risk of the underlying collateral portfolio, credit support, Resimac’s expense reserve and its management of interest rate risk.

“The credit support is sufficient to withstand the stresses we apply,” it said.

“This credit support comprises lenders’ mortgage insurance on the entire portfolio, which provides cover for 100 per cent of the face value of the loans, accrued interest, and reasonable costs of enforcement, as well as note subordination for the rated notes.

“Our expectation that the various mechanisms to support liquidity within the transaction, including a liquidity facility equal to one per cent of the outstanding balance of the notes, and principal draws, are sufficient under our stress assumptions to ensure timely payment of interest.”

S&P said interest rate risk between any fixed-rate mortgages and the floating rate obligations on the RMBS notes are appropriately hedged via an interest rate swap to be provided by NAB.

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