Fitch Affirms Ratings of 10 Illawarra CMBS Tranches

(The following statement was released by the rating agency)

SYDNEY, February 06 (Fitch) Fitch Ratings has affirmed the ratings of two CMBS 
transactions, as detailed below. The transactions are securitisations of 
Australian small balance commercial mortgages originated by IMB Limited (IMB). 
The rating actions are as follows:

Illawarra Series 2007-1 CMBS Trust (Illawarra 2007-1 CMBS):

AUD7.7m Class A (ISIN AU3FN0002747) affirmed at 'AAAsf'; Outlook Stable;

AUD12.3m Class B (ISIN AU3FN0002754) affirmed at 'AAAsf'; Outlook Stable;

AUD10.2m Class C (ISIN AU3FN0002838) affirmed at 'AAsf'; Outlook Stable;

AUD8.0m Class D (ISIN AU3FN0002853) affirmed at 'Asf'; Outlook Stable; and

AUD4.3m Class E (ISIN AUSFN0002788) affirmed at 'BB+sf'; Outlook Stable.

Illawarra Series 2011-1 CMBS Trust (Illawarra 2011-1 CMBS):

AUD74.3m Class A (ISIN AU3FN0014007) affirmed at 'AAAsf'; Outlook Stable;

AUD5.2m Class B (ISIN AU3FN0014015) affirmed at 'AAsf'; Outlook Stable; 

AUD8.4m Class C (ISIN AU3FN0014023) affirmed at 'Asf'; Outlook Stable;

AUD9.7m Class D (ISIN AU3FN0014031) affirmed at 'BBBsf'; Outlook Stable; and

AUD2.0m Class E (ISIN AUSFN0014049) affirmed at 'BBsf'; Outlook Stable.

KEY RATING DRIVERS

The rating actions reflect Fitch's view that available credit enhancement 
supports the notes at their current ratings, the agency's expectations of 
Australia's economic conditions and that the credit quality and performance of 
the underlying loans has remained within the agency's expectations. Arrears and 
losses have been consistently low and excess spread has remained stable. The 
sequential amortisation of the notes has resulted in an improvement in credit 
enhancement for all senior notes. 

As the mortgage portfolios reduce in size, the risk of principal losses 
resulting from the concentrated default of large loans becomes the primary 
driver for Fitch's analysis.

Since closing in May 2007, Illawarra 2007-1 CMBS has experienced two defaults 
generating a loss of AUD261,288, which was fully covered by the excess spread 
and credit enhancement provided by the unrated Class F notes. Arrears have 
historically been low and, at end-November 2013 30+ days arrears were 0.4% of 
the outstanding pool balance.

Illawarra Series 2011-1 CMBS has experienced no defaults since closing in August 
2011. At end-November 2013 just one loan with a balance of AUD123,277, was in 
arrears by 60-89 days, equivalent to 0.1% of the outstanding pool balance.

RATING SENSITIVITIES 

Current and expected concentration levels in both portfolios are a constraint on 
the ratings.

The prospect for downgrades is considered remote at present given the 
satisfactory performance of the pools. Unexpected increases in delinquencies, 
defaults and losses would be necessary before any negative rating action would 
be considered. Sequential pay-down has increased credit enhancement for the 
senior notes of all transactions, which can withstand multiples of the latest 
reported arrears. 

Fitch's initial key rating drivers and rating sensitivities are further 
discussed in the new issue report 'Illawarra Series 2011-1 CMBS Trust' dated 30 
Aug 2011 available on www.fitchratings.com.

Contacts:

Lead Surveillance Analyst

Hai Duong Le

Analyst

+61 2 8256 0358

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

Committee Chairperson

Natasha Vojvodic

Senior Director

+61 2 8256 0350

The source of information used to assess these ratings was the servicer (IMB 
Limited). 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; "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 "Criteria for Rating CMBS in 
Asia-Pacific", dated 24 April 2013 are available at www.fitchratings.com.

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

Additional information is 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

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

Criteria for Rating CMBS in Asia-Pacific

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=706579

Additional Disclosure 

Solicitation Status 

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=819890

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 
FREE WEB SITE AT 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.

Fitch Australia Pty Ltd holds an Australian financial services licence (AFS 
licence no. 337123) which authorises it to provide credit ratings to wholesale 
clients only. Credit ratings information published by Fitch is not intended to 
be used by persons who are retail clients within the meaning of the Corporations 
Act 2001.