Fitch Affirms ConQuest 2010-1R Trust at 'AAAsf'

(The following statement was released by the rating agency)

SYDNEY, March 02 (Fitch) Fitch Ratings has affirmed ConQuest 2010-1R Trust's 
Class A notes, as shown below. The transaction is a securitisation of 
first-ranking Australian conforming residential mortgages originated by MyState 
Financial Limited.

AUD100m Class A notes (ISIN AU3FN0010617) affirmed at 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

The affirmation reflects Fitch's view that available credit enhancement is 
sufficient to support the notes' current ratings, and the agency's expectations 
of Australia's economic conditions. The credit quality and performance of the 
loans in the collateral pool have remained in line with expectations. The 
transaction remains within its substitution period with principal collections 
being used to purchase additional receivables.

As at end-January 2014, 30+ days arrears stood at 0.57%, compared to Fitch's 
3Q13 Dinkum Prime Index of 1.19%. Since closing in May 2010, ConQuest 2010-1R 
has experienced six defaults, resulting in four losses totalling AUD219,227. All 
losses have been covered by lenders' mortgage insurance (LMI) and excess spread.

LMI covered 30% of the underlying portfolio, and provided by Genworth Financial 
Mortgage Insurance Pty Ltd (24%) and QBE Lenders' Mortgage Insurance Limited 
(6%; Insurer Financial Strength Rating: AA-/Stable).

The transaction remains within its ten-year substitution period, ending in 2020, 
and no amortisation of the notes has occurred to date. Fitch is comfortable with 
the long revolving period because the portfolio stratifications have not changed 
significantly since initial issue, MyState's product mix has not materially 
changed over this time, and the portfolio is performing as expected.

RATING SENSITIVITIES

A significant and unexpected increase in delinquencies, defaults and losses 
would be necessary for a negative rating action to be considered. Credit 
enhancement levels for the Class A notes can support multiples of the arrears 
levels reported in the latest investor reports.

Contacts:

 

Lead Surveillance Analyst     

Brenden Asplin

Analyst

+61 2 8256 0340

Fitch Australia Pty Ltd., Level 15, 77 King St, Sydney, NSW 2000

Committee Chairperson      

Natasha Vojvodic

Senior Director

+61 2 8256 0350      

Media Relations: Iselle Gonzalez, Sydney, Tel: +61 2 8256 0326, Email: 
iselle.gonzalez@fitchratings.com.

Additional information is available at www.fitchratings.com. 

The source of information used to assess these ratings was the servicer, MyState 
Financial Ltd. The issuer has informed Fitch that not all relevant underlying 
information used in the analysis of the rated notes is public.

Applicable criteria, "Global Structured Finance Rating Criteria", dated 24 May 
2013 "Global Criteria for Lenders' Mortgage Insurance in RMBS" dated 1 August 
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 and "Counterparty Criteria for Structured Finance and Covered Bonds: 
Derivative Addendum", dated 13 May 2013, are available at www.fitchratings.com.

Applicable Criteria and Related Research: 

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Global Criteria for Lenders’ Mortgage Insurance in RMBS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709255

APAC Residential Mortgage Criteria - Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709855

APAC Residential Mortgage Criteria Addendum – Australia - Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710259

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155

Counterparty Criteria for Structured Finance and Covered Bonds: Derivative 
Addendum

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707156

Additional Disclosure 

Solicitation Status 

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=822152

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licence no. 337123) which authorises it to provide credit ratings to wholesale 
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Act 2001.