Bangkok--15 Jul--Standard & Poor's
-Pepper Prime 2013-1 Trust is a securitization of prime residential mortgages originated by GE Capital Finance Australasia Pty Ltd., now owned by Pepper Australia Pty Ltd.
-We have assigned a preliminary rating to an additional class of notes to be issued by Permanent Custodians Ltd. as trustee of Pepper Prime 2013-1 Trust.
-The preliminary rating reflects our opinion of the transaction's credit support, collateral pool, servicer, and other features based on our current criteria and assumptions.
MELBOURNE (Standard & Poor's) July 15, 2014--Standard & Poor's Ratings Services today assigned its 'A-1+ (sf)' preliminary rating to the class A-u2 notes to be issued by Permanent Custodians Ltd. as trustee of Pepper Prime 2013-1 Trust (see list). Pepper Prime 2013-1 Trust is a securitization of prime residential mortgage loans originated by GE Capital Finance Australasia Pty Ltd. (GE Capital) and now owned by Pepper Australia Pty Ltd. (Pepper).
The issuance of class A-u2 notes, along with principal retained in the redemption fund, will be used to repay the outstanding class A-u1 notes on their scheduled maturity date as contemplated in the transaction documents. Our preliminary rating reflects: Our view of the credit risk of the underlying collateral portfolio, including the fact that this is a closed portfolio, which means no further loans may be assigned to the trust.
Our preliminary rating reflects:
-Our view of the credit risk of the underlying collateral portfolio,
including the fact that this is a closed portfolio, which means no
further loans may be assigned to the trust.
-Our view of the origination and debt-servicing assessment processes of GE
-Our view of the servicing standards of Pepper. Capital.
-Our view that the credit support is sufficient to withstand the stresses we apply. This credit support comprises mortgage insurance to 100% of the portfolio, which covers 100% of the face value of the loans, accrued interest, and reasonable costs of enforcement, as well as note subordination.
-The benefit of a cross-currency swap provided by National Australia Bank Ltd. (NAB) to hedge the mismatch between the Australian dollar receipts from the underlying assets and the U.S. dollar payments on the class A-u2 notes.Ltd. (NAB) to hedge the mismatch between the Australian dollar receipts from the underlying assets and the U.S. dollar payments on the class A-u2 notes.
-The reliance of the full repayment of the class A-u2 notes on the subscription for the class AR-u notes by the redemption facility provider, NAB, in the event that insufficient principal receipts have built up in the redemption fund. Therefore, the rating is linked to that on redemption facility provider NAB.
-Our expectation that the various mechanisms to support liquidity within the transaction, including a liquidity facility equal to 1.5% of the invested amount of the notes, and principal draws, are sufficient under
our stress assumptions to ensure timely payment of interest.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORTSEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at at http://standardandpoorsdisclosure-17g7.com
REGULATORY DISCLOSURES Please refer to the initial rating report for any additional regulatory
disclosures that may apply to a transaction.
PRELIMINARY RATINGS ASSIGNED
Class Rating Amount (US$ mil.)
A-u2 A-1+ (sf) 185