(The following statement was released by the rating agency)Link to Fitch Ratings' Report: Pinnacle Series Trust 2013-T1http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720916 SYDNEY, October 16 (Fitch) Fitch Ratings has assigned final ratings to Pinnacle Series Trust 2013-T1. The transaction is a securitisation of first-ranking Australian residential, full-documentation mortgage loans originated by Police and Nurses Limited, trading as P&N Bank, and due January 2045. The ratings are as follows:AUD276.0m Class A notes: 'AAAsf'; Outlook Stable;AUD16.5m Class AB notes: NR; AUD6.0m Class B-1 notes: NR; andAUD1.5m Class B-2 notes: NR.The notes are issued by BNY Trust Company of Australia Limited as trustee of Pinnacle Series Trust 2013-T1. The transaction is a legally distinct trust established pursuant to a master trust deed.At the cut-off date, the total collateral pool consisted of 1,859 loans originated by P&N totalling approximately AUD294.4m. KEY RATING DRIVERSConservative Originator: P&N has been involved in the origination and management of housing loans since 1990, servicing 10,609 residential mortgages, with AUD2.18bn outstanding as at 31 August 2013. Strong Collateral Characteristics: The weighted-average (WA) seasoning of the portfolio is 50.4 months, with a WA current loan/value ratio (LVR) of 57.1% and a WA indexed LVR of 53.9%. A total of 1.9% of the pool has a fixed interest rate. This exposure is not hedged, but it does not represent a significant risk given its small proportion and rapid run-off profile. Further, floating rate loans cannot be converted to fixed rates within the trust. Sequential/Pro-Rata Structure: Interest is paid sequentially to the Class A and AB notes, and then pari passu among the B-1 and B-2 notes. Interest on the Class B notes is calculated on both stated and invested balances, with the portion of interest calculated on invested balance exceeding that calculated on stated balance being subordinated in the interest waterfall. If pro-rata conditions are not met, the principal is paid sequentially. When pro-rata conditions are met, principal is paid pari passu between all classes. Geographic Concentration: Collateral is strongly concentrated in Western Australia, reflecting P&N's origins and highly localised branch network. Western Australia accounts for 95.4% of the pool, with Perth metropolitan area accounting for 83.1%. Fitch has applied increased default probability assumptions at each of the state, regional, and postcode levels due to the high degree of geographic concentration. Typical Support Features: The final ratings are based on: lenders' mortgage insurance (LMI) policies covering 100% of the pool; a liquidity reserve equivalent to 1.0% of the outstanding balance of the mortgages; and P&N's mortgage underwriting and servicing capabilities.RATING SENSITIVITYUnexpected decreases in residential property values, increases in the frequency of foreclosures, and loss severity on defaulted mortgages could produce loss levels higher than Fitch's base case, which could result in potentially negative rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to Pinnacle Series Trust 2013-T1 to increased defaults and decreased recovery rates over the life of the transaction. Fitch's key rating drivers and sensitivities are discussed in the corresponding new issue report entitled "Pinnacle Series Trust 2013-T1", published today. Included as an appendix to the report are a description of the representations, warranties, and enforcement mechanismsContacts: Primary AnalystAnthea ClarkAssociate Director+61 2 8256 0379Fitch Australia Pty Ltd., Level 15, 77 King Street, Sydney NSW 2000Secondary AnalystDavid CarrollDirector+61 2 8256 0333Committee ChairpersonNatasha VojvodicSenior Director, +61 2 8256 0350Media Relations: Iselle Gonzalez, Sydney, Tel: +61 2 8256 0326, Email: iselle.gonzalez@fitchratings.com.The source of information used to assess these ratings was Police and Nurses Limited, and its legal counsel, Allen and Overy. The issuer has informed Fitch that not all relevant information about the rated notes is public.Additional information is available atwww.fitchratings.com. Applicable criteria, "Global Structured Finance Rating Criteria", dated 24 May 2013; "APAC Residential Mortgage Criteria", dated 1 August 2013; "APAC Residential Mortgage Criteria Addendum - Australia", dated 1 August 2013; "Counterparty Criteria for Structured Finance and Covered Bonds", dated 13 May 2013; "Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum", dated 13 May 2013; and "Global Criteria for Lender's Mortgage Insurance in RMBS", dated 1 August 2013 are available atwww.fitchratings.com. Applicable Criteria and Related Research: Global Structured Finance Rating Criteriahttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661 APAC Residential Mortgage Criteriahttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709855 APAC Residential Mortgage Criteria Addendum ?? Australiahttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710259 Counterparty Criteria for Structured Finance and Covered Bondshttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155 Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendumhttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707156 Global Criteria for Lenders?? Mortgage Insurance in RMBShttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709255 Additional Disclosure Solicitation Statushttp://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=805112 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
(Repeat for additional subscribers)
Oct 16 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned final ratings to Pinnacle Series Trust 2013-T1. The transaction is a securitisation of first-ranking Australian residential, full-documentation mortgage loans originated by Police and Nurses Limited, trading as P&N Bank, and due January 2045. The ratings are as follows:
AUD276.0m Class A notes: 'AAAsf'; Outlook Stable;
AUD16.5m Class AB notes: NR;
AUD6.0m Class B-1 notes: NR; and
AUD1.5m Class B-2 notes: NR.
The notes are issued by BNY Trust Company of Australia Limited as trustee of Pinnacle Series Trust 2013-T1. The transaction is a legally distinct trust established pursuant to a master trust deed.
At the cut-off date, the total collateral pool consisted of 1,859 loans originated by P&N totalling approximately AUD294.4m.
KEY RATING DRIVERS
Conservative Originator: P&N has been involved in the origination and management of housing loans since 1990, servicing 10,609 residential mortgages, with AUD2.18bn outstanding as at 31 August 2013.
Strong Collateral Characteristics: The weighted-average (WA) seasoning of the portfolio is 50.4 months, with a WA current loan/value ratio (LVR) of 57.1% and a WA indexed LVR of 53.9%. A total of 1.9% of the pool has a fixed interest rate. This exposure is not hedged, but it does not represent a significant risk given its small proportion and rapid run-off profile. Further, floating rate loans cannot be converted to fixed rates within the trust.
Sequential/Pro-Rata Structure: Interest is paid sequentially to the Class A and AB notes, and then pari passu among the B-1 and B-2 notes. Interest on the Class B notes is calculated on both stated and invested balances, with the portion of interest calculated on invested balance exceeding that calculated on stated balance being subordinated in the interest waterfall. If pro-rata conditions are not met, the principal is paid sequentially. When pro-rata conditions are met, principal is paid pari passu between all classes.
Geographic Concentration: Collateral is strongly concentrated in Western Australia, reflecting P&N's origins and highly localised branch network. Western Australia accounts for 95.4% of the pool, with Perth metropolitan area accounting for 83.1%. Fitch has applied increased default probability assumptions at each of the state, regional, and postcode levels due to the high degree of geographic concentration.
Typical Support Features: The final ratings are based on: lenders' mortgage insurance (LMI) policies covering 100% of the pool; a liquidity reserve equivalent to 1.0% of the outstanding balance of the mortgages; and P&N's mortgage underwriting and servicing capabilities.
RATING SENSITIVITY
Unexpected decreases in residential property values, increases in the frequency of foreclosures, and loss severity on defaulted mortgages could produce loss levels higher than Fitch's base case, which could result in potentially negative rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to Pinnacle Series Trust 2013-T1 to increased defaults and decreased recovery rates over the life of the transaction.
Fitch's key rating drivers and sensitivities are discussed in the corresponding new issue report entitled "Pinnacle Series Trust 2013-T1", published today. Included as an appendix to the report are a description of the representations, warranties, and enforcement mechanisms
((Bangalore Ratings Team, Hotline: +91 80 6677 2513, Bhanu.priya@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: Bhanu.Priya.reuters.com@reuters.net))
Keywords: Fitch Assigns Pinnacle Series Trust 2013 T1 Final
