WB Trust 2008-1 Class A Notes #AAA (sf)# Rating Affirmed After Note Issuance

Stocks and Financial Services Press Releases Tuesday June 5, 2018 16:27
MELBOURNE--5 Jun--S&P Global Ratings

MELBOURNE (S&P Global Ratings) June 5, 2018--S&P Global Ratings today affirmed its 'AAA (sf)' rating on the class A residential mortgage-backed securities (RMBS) issued by Perpetual Trustee Co. Ltd. as trustee for WB Trust 2008-1.

The rating affirmation follows the acquisition of approximately A$50 million in loans to be funded by the issuance of class A notes, as contemplated in the transaction structure. This brings the total class A note balance to A$276.9 million. A total of A$0.8 million of the unrated class B notes will be redeemed to bring the class B note balance to A$50.2 million.

The affirmation reflects:
  • Our view of the credit risk of the underlying collateral portfolio, which has 1,096 consolidated loans, a weighted-average current loan-to-value ratio of 77.2%, and weighted-average loan seasoning of 78.6 months. Some 55.9% of the portfolio is security properties that we classify as nonmetropolitan. Our view is that defaults on nonmetropolitan properties would be more frequent during periods of economic stress because of population and economic factors.
  • Some 32.6% of the portfolio is interest-only loans, reverting to fully amortizing, and a further 7.1% of loans are line of credit. S&P Global Ratings' view is that certain products, including loans with interest-only periods, can heighten a borrower's sensitivity to changes in macroeconomic factors during an economic downturn.
  • Some 80.4% of the properties in the portfolio are in Queensland, representing a significant geographic-concentration risk. Our geographic-concentration limit for Queensland is 40%, as per table 2 of our "Australian RMBS Rating Methodology And Assumptions" criteria, published on Sept. 1, 2011. Our view is that more clustered geographic distributions are at greater risk of being adversely affected by a localized economic downturn.
  • Transaction performance has been within our expectations since transaction close. A total of 1.4% of the loans in the pool are in arrears greater than 30 days as of May 25, 2018, of which 1.0% are more than 90 days in arrears. There has been A$5.8 million of losses to date, most of which have been covered by lenders' mortgage insurance (LMI) and a small amount covered by excess spread.
  • The credit support provided to the class A notes of 15.35%, by way of subordination of the class B notes, is commensurate with the 'AAA (sf)' assessed credit support, after credit being given to LMI and is thereby sufficient to withstand the stresses commensurate with the rating.
  • The support provided by LMI policies covering 39.5% of the pool of mortgages. The LMI providers in this transaction are QBE Lenders' Mortgage Insurance Ltd. and Genworth Financial Mortgage Insurance Pty Ltd. The LMI policies on the insured loans cover 100% of the outstanding principal of the loans insured, including accrued interest during the recovery period and reasonable realization costs.
  • Our expectation that the liquidity reserve, equaling A$5.9 million of the notes outstanding within the transaction, is adequate under our stress assumptions to cover timely payment of interest.
  • The structure incorporates a substitution period that ends on July 31, 2021. During the substitution period, the structure permits the trapping of principal up to a capped amount, which can be used to acquire additional eligible receivables. To mitigate the potential for negative carry risk due to the buildup of principal over time, any amount in excess of the capped amount is to be passed through and applied to principal collections to repay noteholders.
  • The interest-rate swap provided by Auswide Bank Ltd. and supported by Australia and New Zealand Banking Group Ltd. as the standby swap provider to hedge the receipts from fixed-interest loans against the floating-rate obligations of the trust. The servicer can only convert variable-rate loans to fixed-rate loans if the amount of fixed-rate loans in the portfolio is less than 60%. Fixed-rate loans currently make up 39.5% of the portfolio.
RATING AFFIRMED
Class Rating Amount (mil. A$)
A AAA (sf) 276.9

Latest Press Release

Fitch Affirms Standard Chartered Bank (Thai) at #A-#; Outlook Stable

Fitch Ratings has affirmed Standard Chartered Bank (Thai) Public Company Limited's (SCBT) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'A-' with a Stable Outlook. At the same time, the agency has affirmed SCBT's National...

Photo Release: KBank recognized as having the highest corporate brand value in the banking business category 2nd consecutive year

At Sukree Kaewcharoen Auditorium, the Stock Exchange of Thailand (SET), Ms. Kattiya Indaravijaya, KBank President, recently represented KBank to receive the "Thailand's Top Corporate Brand Values 2018" award in the banking business category from...

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงานในเกาหลี เปิดโอกาสให้แรงงาน 1.5 ล้านคนได้ใช้เงินดิจิทัล

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงาน Korea Association of Care Workers (KACW) เพื่อนำสกุลเงินดิจิทัล MicroBitcoin มาใช้ สัญญานี้ลงนามร่วมกันสามฝ่าย ได้แก่ MicroBitcoin Open Source Community, KACW และ Bluequotient...

MicroBitcoin Open Source Community Signs an Exclusive Contract with the Korea Association of Care Workers (KACW) to Expand its Usability to One and a Half Million Users

The MicroBitcoin Open Source Community has signed a contract with Korea Association of Care Workers (KACW) to adapt the MicroBitcoin blockchain network protocol. The trilateral contract was made between the MicroBitcoin Open Source Community, the Korea...

WICE establishes a joint-venture, EUROASIA TOTAL LOGISTICS, with its holding 40% of shares to provide cross-border transport services between China, Hong Kong

WICE establishes a joint-venture, "EUROASIA TOTAL LOGISTICS", with its holding 40% of shares to provide cross-border transport services between China, Hong Kong, and South East Asia with the expectation to achieve the first year's revenue at 200 million...

Related Topics