Progress 2008-1R Trust Class A And Class AB Note Ratings Affirmed

Stocks and Financial Services Press Releases Monday June 25, 2018 12:21
MELBOURNE--26 Jun--S&P Global Ratings

MELBOURNE (S&P Global Ratings) June 25, 2018--S&P Global Ratings today affirmed its 'AAA (sf)' ratings on the class A and class AB residential mortgage-backed securities (RMBS) issued by Perpetual Trustee Co. Ltd. as trustee for Progress 2008-1R Trust.

Progress 2008-1R Trust is a securitization of prime residential mortgages originated by AMP Bank Ltd. The transaction is in its substitution period until October 2026, before which principal collections are retained for the purchase of future assets, as contemplated in the transaction documents.

The affirmations reflect:
  • Our view of the credit risk of the underlying collateral portfolio. As of June 2018, the pool has a current balance of about A$2.96 billion. The pool's current weighted-average loan-to-value ratio is 64.0% and the weighted-average seasoning is 33.7 months. Some 17.7% of the portfolio's collateral pool is covered by lenders' mortgage insurance, which covers 100% of the face value of these loans, accrued interest, and reasonable costs of enforcement.
  • Our view that interest-only loans can create a payment shock when the payments revert to fully amortizing during the remaining term of the loan, leading to a higher risk of default. Interest-only loans make up 25.8% of the portfolio, converting to fully amortizing after the interest-only period.
  • Our view that the credit support provided to the rated classes of notes exceeds the minimum assessed credit support at a 'AAA (sf)' level before giving credit to lenders' mortgage insurance.
  • Our view that the liquidity reserve provided equal to A$45.0 million, which will amortize with the note balance, is sufficient under our rating stress assumptions to ensure timely payment of interest.

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