(The following statement was released by the rating agency)LONDON, April 14 (Fitch) Fitch Ratings has assigned The Thekwini Fund 11 (RF) Limited's (Thekwini 11) tap issue notes final National Long-term ratings, as follows:ZAR227m class A7 notes: 'AAA(zaf) '; Outlook StableZAR832m class A8 notes: 'AAA(zaf) '; Outlook StableZAR67m class B3 notes: 'A+(zaf) '; Outlook StableZAR45m class C3 notes: 'BBB-(zaf) '; Outlook StableZAR29m class D3 notes: Not ratedFitch has simultaneously affirmed the National, Long-term ratings of the existing tranches previously issued by Thekwini 11 as follows:ZAR400m class A1 notes: 'AAA(zaf)'; Outlook StableZAR500m class A2 notes: 'AAA(zaf)'; Outlook StableZAR45m class A3 notes: 'AAA(zaf)'; Outlook StableZAR374m class A4 notes: 'AAA(zaf)'; Outlook StableZAR433m class A5 notes: 'AAA(zaf)'; Outlook StableZAR253m class A6 notes: 'AAA(zaf)'; Outlook StableZAR59m class B1 notes: 'A+(zaf)'; Outlook StableZAR66m class B2 notes: 'A+(zaf)'; Outlook StableZAR48m class C1 notes: 'BBB-(zaf)'; Outlook StableZAR54m class C2 notes: 'BBB-(zaf)'; Outlook StableZAR18m class D1 notes: Not ratedZAR20m class D2 notes: Not ratedZAR79.8m sub loan: Not ratedThe transaction is a securitisation of residential mortgages originated by South African Home Loans (Pty) (SAHL) in South Africa, which closed in August 2013. Thekwini 11 has issued additional tranches under this second tap: the notes that have been assigned a final rating total ZAR1,171m. Including the unrated class D3 notes and a subordinated loan, the total new issue is ZAR1,228m. Credit enhancement is provided by over-collateralisation and a reserve fund of 2.5% and, after the tap issue, total 13.88% for the class A notes, 8.33% for the class B notes and 4.09% for the class C notes. For the class A notes, this calculation is based on an aggregate amount for the class A7, A8 and A9 notes of ZAR1,059m. KEY RATING DRIVERSFitch's analysis carried out for this tap issue confirmed that the underlying portfolio's characteristics have substantially remained in line with the original issue's analysis. The following key rating drivers still apply.Strong Originator PerformanceFitch views the performance of mortgages originated by SAHL as stronger than the overall South African market, which is evidenced by the lender's cumulative default data. Furthermore, SAHL's servicing and arrears management demonstrate lower property sale discounts and shorter average work-out timelines compared with peers. The agency considered this by applying a 20% downward adjustment to the loan default probabilities assumed at 'B(zaf)'. Limited Revolving PeriodThe transaction originally had a 1.5-year revolving period, due to end in January 2015, under which principal collections may be used to purchase additional home loans, subject to the satisfaction of portfolio covenants. Fitch considers the portfolio covenants sufficient to mitigate a material deterioration in performance during the revolving period. Low LTVsThe transaction features loans with a maximum loan to value (LTV) ratio of 81% and a portfolio covenant that limits any increase in the weighted average (WA) LTV from the initial portfolio to 1% during the revolving period. This covenant restricts the deterioration in credit quality of the initial portfolio and also limits the dilution of potential recoveries through replenishment. The WA LTV for the combined portfolio (including both the existing securitised portfolio and the tap issue's provisional portfolio) was 66.6%.Stable Asset OutlookFitch expects both housing affordability and underlying mortgage performance to remain stable. Nominal house prices increased between 2011 and 2013, and this trend is set to continue over the coming years, albeit at a slower rate. Fitch also expects income growth to remain subdued and therefore housing affordability to remain stable through 2014. Lenders are still working out defaulted loans underwritten in the pre-crisis years, and the least attractive properties may still have to be sold.RATING SENSITIVITIESMaterial increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than Fitch's base case expectations, which in turn may result in negative rating actions on the notes. In particular, default rates and recoveries that are respectively 15% higher and lower than currently assumed by the agency would result in a downgrade of the class A notes to 'AA(zaf)' from 'AAA(zaf)'. More detailed model implied ratings sensitivity can be found in the presale report at 
  www.fitchratings.com.
  For its ratings analysis, Fitch used the loan-by-loan information provided by SAHL and aggregate statistics that were compared to the original issuance. Fitch analysed the collateral using its mortgage loss model, as described in the applicable criteria (see below). The agency assessed the transaction cash flows using its proprietary cash-flow model, further described in 'EMEA Cash Flow Analysis Criteria'.Contacts: Primary Analyst Akimasa OkadaAnalyst+44 20 3530 1625Fitch Ratings Limited30 North ColonnadeLondon E14 5GNSecondary Analyst Selena GreaneySenior Director+44 20 3530 1135Committee Chairperson Andreas WilgenManaging Director+44 20 3530 1171Media Relations: Athos Larkou, London, Tel: +44 203 530 1549, Email: athos.larkou@fitchratings.com.Additional information is available at 
  www.fitchratings.com.
 Sources of information: SAHL and Standard Bank of South AfricaApplicable criteria, 'EMEA RMBS Master Rating Criteria', dated 6 June 2013, 'EMEA Residential Mortgage Loss Criteria', dated 6 June 2013, 'EMEA Cash Flow Analysis Criteria', dated 6 June 2013, 'EMEA Criteria Addendum - South Africa' dated 21 February 2013, 'Counterparty Criteria for Structured Finance and Covered Bonds', dated 13 May 2013, and 'Criteria for Servicing Continuity Risk in Structured Finance', dated 29 July 2013 are available at 
  www.fitchratings.com.
 Applicable Criteria and Related Research: EMEA RMBS Cash Flow Analysis Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709916
 EMEA Criteria Addendum - South Africa
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=702190
 Counterparty Criteria for Structured Finance and Covered Bonds
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155
 EMEA RMBS Master Rating Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709893
 EMEA Residential Mortgage Loss Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709915
 Criteria for Servicing Continuity Risk in Structured Finance
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=712935
 Additional Disclosure Solicitation Status 
  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=826885
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