Firstmac Mortgage Funding Trust No.4 Series 1-2020 Prime RMBS Assigned Preliminary Ratings

MELBOURNE (S&P Global Ratings) March 27, 2019--S&P Global Ratings today 
assigned preliminary ratings to seven of the eight classes of prime 
residential mortgage-backed securities (RMBS) to be issued by Firstmac 
Fiduciary Services Pty Ltd. as trustee for Firstmac Mortgage Funding Trust 
No.4 Series 1-2020 (see list).

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 of the credit support, which is sufficient to withstand the stresses we apply. Credit support for the rated notes comprises note subordination, excess spread, and lenders' mortgage insurance on 6.2% of the portfolio.
  • Our expectation that the various mechanisms to support liquidity within the transaction, including a liquidity reserve equal to 1.1% of the outstanding note balance, subject to a floor of A$968,000, and the principal draw function are sufficient to ensure timely payment of interest.
  • The extraordinary expense reserve of A$150,000, funded from day one by Firstmac Ltd., available to meet extraordinary expenses. The reserve will be topped up via excess spread if drawn.
  • The fixed- to floating-rate interest-rate swap provided by National Australia Bank Ltd. to hedge the mismatch between receipts from fixed-rate mortgage loans and the variable-rate RMBS.
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