RPT-Fitch Upgrades 4 Flexi ABS Trust 2012-1 Notes; Affirms 1

Fri Jul 12, 2013 3:30am EDT

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July 12 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has upgraded four classes of Flexi ABS Trust 2012-1 and affirmed one, as shown below. The transaction is a securitisation backed by small balance consumer loan receivables due October 2016. The notes were issued by Perpetual Corporate Trust Limited in its capacity as trustee of Flexi ABS Trust 2012-1.

AUD69.79m Class A2 notes (ISIN AU3FN0016218): affirmed at 'AAAsf'; Outlook Stable

AUD20.06m Class B notes (ISIN AU3FN0016226): upgraded to 'AAAsf' from 'AAsf'; Outlook Stable

AUD8.2m Class C notes (ISIN AU3FN0016234): upgraded to 'AAsf' from 'Asf'; Outlook Stable

AUD4.56m Class D notes (ISIN AU3FN0016242): upgraded to 'BBB+sf' from 'BBBsf'; Outlook Stable

AUD3.65m Class E notes (ISIN AU3FN0016259): upgraded to 'BB+sf' from 'BBsf'; Outlook Stable

Class A1 notes were paid in full on 6 February 2013

KEY RATING DRIVERS

The transaction has performed better than Fitch's initial expectations since closing on 9 August 2012. Total net losses have been well below Fitch's base case to date and excess spread has been more than sufficient to cover any losses experienced.

As at 31 May 2013, the 30+days and 90+ day delinquency rates were 1.62% and 0.3% of the collateral pool. Cumulative losses since closing have been low, totalling AUD2.04m, below Fitch's expected losses of AUD4.22m. The weighted average remaining term and weighted average seasoning were both17 months, compared with 22 and seven months, respectively, at end-August 2012. As of May 2013, the liquidity reserve was AUD2.3m. The collateral pool consisted of 61,219 loans with a total portfolio balance of AUD113.05m and an average contract balance of AUD1,847.

RATING SENSITIVITIES

The prospect for downgrades is considered remote at present given the current performance of the pool, as well as adequate excess spread and subordination. The consumer loans in the collateral pool are vulnerable to a drastic downturn in the Australian economy.

Initial key rating drivers and rating sensitivity are described further in the New Issue report dated 9 August 2012.

A comparison of the transaction's representations, warranties and enforcement mechanisms (RW&Es) to those of typical RW&Es for this asset class is available by accessing the reports and/or links given under Related Research below.

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