Non-bank lender Resimac has been assigned the top credit rating for three classes of its prime residential mortgage-backed securities (RMBS) by Standard & Poor’s (S&P).
The credit ratings agency assigned a AAA rating to Resimac’s A1, A2 and AB classes of RMBS 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 Resimac’s underlying collateral portfolio, including that it is a closed portfolio, “which means that no further loans will be assigned to the trust after the closing date”.
Furthermore, S&P said the ratings reflect that this portfolio’s credit support is sufficient to withstand the pressures applied by the agency.
“This credit support comprises lenders’ mortgage insurance on 32.4 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,” it said.
S&P also noted that the interest-rate risk between any fixed-rate mortgages 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: Resimac receives top ratings for prime RMBS]