Ratings Assigned To Liberty Series 2013-1 Trust RMBS

Stocks and Financial Services Press Releases Monday March 18, 2013 08:17
MELBOURNE--18 Mar--Standard & Poor's

MELBOURNE (Standard & Poor's) March 18, 2013—Standard & Poor's Ratings Services today assigned its ratings to eight of the nine classes of residential mortgage-backed securities (RMBS) issued by Liberty Funding Pty. Ltd. in respect of Liberty Series 2013-1 Trust (see list). Liberty Series 2013-1 Trust is a securitization of nonconforming and prime residential mortgages originated by Liberty Financial Ltd.

The ratings reflect:
  • 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 will be assigned to the trust after the closing date.
  • Our view that the credit support is sufficient to withstand the stresses we apply. This credit support comprises mortgage insurance for 12.1% of the portfolio, which covers 100% of the face value of those loans, their accrued interest, and reasonable costs of enforcement, and note subordination for the class A1, class A2, class A3, class B, class C, class D, class E, and class F notes.
  • Our expectation that the various mechanisms to support liquidity within the transaction, including an amortizing liquidity facility equal to 3.5% of the invested amount of class A1, class A2, class A3, class B, class C, class D, class E, and class F notes and the stated amount of class G notes, subject to a floor of A$600,000, and principal draws, are sufficient under our stress assumptions to ensure timely payment of interest.
  • The provision of a reserve account established and maintained through the trapping of excess spread on each payment date. The reserve account may be utilized to meet current loan losses or as liquidity support.
  • he benefit of a fixed-to-floating interest-rate swap provided by National Australia Bank Ltd., to hedge the mismatch between receipts from any fixed-rate mortgage loans and the variable-rate RMBS.
A copy of Standard & Poor's complete report for Liberty Series 2013-1 can be found on Global Credit Portal, Standard & Poor's Web-based credit analysis system, at http://www.globalcreditportal.com.

The issuer has not informed Standard & Poor's (Australia) Pty Limited whether the issuer is publically disclosing all relevant information about the structured finance instruments the subject of this press release or whether relevant information remains non-public.

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