TEXT-Fitch Affirms 8 tranches of 4 Illawarra RMBS Transactions

(The following was released by the rating agency)

SYDNEY, February 19 (Fitch) Fitch Ratings has affirmed 8 tranches from four transactions from the Illawarra series of residential mortgage-backed securities (RMBS). These transactions are backed by pools of first-ranking Australian residential mortgages originated by IMB Limited (IMB).

The rating actions are as listed below.

Illawarra Series 2004-1 RMBS Trust:

AUD56.2m Class A-2 (ISIN AU300ILWC028) affirmed at 'AAAsf'; Outlook Stable

AUD12.5m Class B (ISIN AU300ILWC036) affirmed at 'BBsf'; Outlook Stable

Illawarra Series 2005-1 RMBS Trust:

AUD71.6m Class A (ISIN AU300ILWD018) affirmed at 'AAAsf'; Outlook Stable

AUD13m Class B (ISIN AU300ILWD026) affirmed at 'BBsf'; Outlook Stable

Illawarra Series 2006-1 RMBS Trust:

AUD107.4m Class A (ISIN AU3FN0000139) affirmed at 'AAAsf'; Outlook Stable

AUD12.5m Class B (ISIN AU3FN0000147) affirmed at 'BBsf'; Outlook Stable

Illawarra Series 2010-1 RMBS Trust:

AUD144.0m Class A (ISIN AU3FN0010468) affirmed at 'AAAsf'; Outlook Stable

AUD11m Class AB (ISIN AU3FN0010476) affirmed at 'AAAsf'; Outlook Stable

The affirmations reflect Fitch's view that credit enhancement levels are able to support the notes' current ratings. The sequential amortisation of the notes has resulted in an improvement in credit enhancement for all senior notes. The transactions have performed well, with the credit quality and performance of the loans in the collateral pools reflecting IMB's conservative lending standards.

Since closing, the 30+ days arrears levels for the four Illawarra RMBS transactions have been below Fitch's 30+days Dinkum Index. As at 31 December 2012, Illawarra Series 2004-1 RMBS Trust had the highest level of arrears at 1.03%, while Illawarra Series 2005-1 RMBS Trust recorded no loans in arrears. The transactions have experienced low levels of losses and all losses have been covered by LMI or excess spread.

These pools all have lender mortgage insurance provided by QBE Lenders' Mortgage Insurance Limited (AA-/Stable), Genworth Financial Mortgage Insurance Pty Ltd and Housing Loan Insurance Corporation. Of the four transactions, Illawarra Series 2006-1 RMBS Trust experienced the highest cumulative claims on LMI at 0.04% of the original balance, while Illawarra Series 2010-1 Trust has not experienced any losses to date.