Resimac receives top ratings for prime RMBS

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

The non-bank lender received the ratings for its A1^, A2 and AB classes of RMBS to be issued by Perpetual Trustee Co as a trustee for Resimac Triomphe Trust – Resimac Premier Series 2016-1.

S&P said its ratings reflect the credit risk of the underlying collateral portfolio, including the fact that it is a closed portfolio, “which means that no further loans will be assigned to the trust after the closing date”.

The credit ratings agency said the ratings also reflect that Resimac’s credit support is sufficient to withstand the stresses that S&P applies, as well as the lender’s management of interest-rate risk.

“This credit support comprises lenders’ mortgage insurance on 34.2 per cent of the loans in the portfolio, which provides cover for 100 per cent of the face value of the insured loans, accrued interest and reasonable costs of enforcement, as well as note subordination for the rated notes,” S&P said.

“Interest-rate risk between any fixed-rate mortgage loans and the floating-rate obligations on the notes are appropriately hedged via interest rate swaps to be provided by an appropriately rated interest-rate swap provider.”

[Related: RMBS arrears and defaults to rise, says Moody’s]

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