MTG ICU Trust Repo Series No.1 Prime RMBS Assigned Rating

MELBOURNE (S&P Global Ratings) Dec. 17, 2018--S&P Global Ratings today 
assigned its 'AAA (sf)' rating to the class A prime residential 
mortgage-backed securities (RMBS) issued by AMAL Trustees Pty Ltd. as trustee 
of MTG ICU Trust Repo Series No.1 (see list). MTG ICU Trust Repo Series No.1 
is a securitization of prime residential mortgages originated by Illawarra 
Credit Union Ltd. (ICU).

The rating assigned to the notes reflects:
  • Our view of the credit risk of the underlying collateral portfolio, including the fact that the portfolio has a 10-year substitution period, which means that further loans may be assigned to the trust after the closing date.
  • Our view that the credit support is sufficient to withstand the stresses we apply. Subordination and lenders' mortgage insurance cover on 1.1% of the initial loans in the portfolio provide credit support for the class A notes.
  • Our expectation that the various mechanisms to support liquidity within the transaction, including a liquidity reserve funded by note issuance equal to 1.5% of the note balance and the principal draw function, are sufficient under our stress assumptions to ensure timely payment of interest.
  • The extraordinary expense reserve of A$150,000, funded by note issuance, available to meet extraordinary expenses. The reserve will be topped up via excess spread, to the extent available, if drawn.
  • The transaction documents, which include downgrade language consistent with our counterparty criteria that requires the replacement of the bank account provider to the trust should its rating fall below the applicable rating.
  • The legal structure of the trust, which is established as a special-purpose entity, and meets our criteria for insolvency remoteness.
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