Fitch Affirms Ratings of 11 APOLLO RMBS Tranches

(The following statement was released by the rating agency)

SYDNEY, February 11 (Fitch) Fitch Ratings has affirmed the ratings of 11 
tranches from five APOLLO Series residential mortgage backed securities (RMBS) 
transactions. The transactions are securitisations of first-ranking Australian 
residential mortgages originated by Suncorp-Metway Limited (A+/Stable/F1). A 
list of the rating actions can be found at the end of this commentary.

KEY RATING DRIVERS 

The affirmations reflect 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 pools have remained in line with Fitch's expectations.

The last foreclosure in the portfolio backing APOLLO 2007-1E was in April 2011, 
meaning the total number of foreclosures to date remains at seven, the same as 
at the time of the last rating action in February 2013. Losses on the underlying 
mortgages in the pool have been covered primarily by the lenders' mortgage 
insurance (LMI) provider, QBE Lenders Mortgage Insurance Pty Limited (QBE, 
Insurer Financial Strength Rating: AA-/Stable). The remaining losses were 
covered by excess spread. None of the other APOLLO transactions have experienced 
any defaults since closing. All loans in each of the underlying portfolios are 
covered by LMI from QBE.

All the pools are geographically concentrated in Queensland and Fitch has taken 
this into account in its analysis.

RATING SENSITIVITIES 

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. The 
ratings of all the APOLLO RMBS transactions' senior notes are independent of 
downgrades to the LMI provider's ratings.

The rating actions are as follows:

APOLLO Series 2007-1E (APOLLO 2007-1E):

AUD193.7m Class 1A (ISIN AU0000AOYHA7) affirmed at 'AAAsf'; Outlook Stable;

EUR141.2m Class 2A (ISIN XS0299266972) affirmed at 'AAAsf'; Outlook Stable; and

AUD26.8m Class B (ISIN AU3FN0002580) affirmed at 'BBsf'; Outlook Stable.

APOLLO Series 2009-1 (APOLLO 2009-1):

AUD365.9m Class A3 (ISIN AU3FN0008697) affirmed at 'AAAsf'; Outlook Stable; and

AUD147.8m Class B (ISIN AU3FN0008975) affirmed at 'BBsf'; Outlook Stable.

APOLLO Series 2011-1 (APOLLO 2011-1):

AUD388.3m Class A1 (ISIN AU3FN0014502) affirmed at 'AAAsf'; Outlook Stable;

AUD250.0m Class A2 (ISIN AU3FN0014510) affirmed at 'AAAsf'; Outlook Stable; and

AUD65.0m Class AB (ISIN AU3FN0014528) affirmed at 'AAAsf'; Outlook Stable.

APOLLO Series 2012-1 (APOLLO 2012-1):

AUD658.0m Class A1 (ISIN AU3FN0016515) affirmed at 'AAAsf'; Outlook Stable; and

AUD52.0m Class AB (ISIN AU3FN0016523) affirmed at 'AAAsf'; Outlook Stable.

APOLLO Series 2013-1 (APOLLO 2013-1):

AUD904.6m Class A (ISIN AU0000AORHA1) affirmed at 'AAAsf'; Outlook Stable.

Fitch's initial key rating drivers and rating sensitivities are further 
discussed in the new issue report for each transaction, with the exception of 
the new issue reports for APOLLO 2007-1E and 2009-1, which do not include rating 
sensitivities. All reports are available at www.fitchratings.com.

Individual representations, warranties, and enforcement mechanism reports are 
available for all structured finance transactions initially rated on or after 26 
September 2011 at www.fitchratings.com.

Contacts:

Lead Surveillance Analyst

Anthea Clark

Analyst

+61 2 8256 0379

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

Committee Chairperson

Alison Ho 

Senior Director

+852 2263 9937  

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

The source of information used to assess these ratings was the servicer 
Suncorp-Metway Limited. The issuer has informed Fitch that not all relevant 
underlying information used in the analysis of the rated notes is public.

Additional information is available at www.fitchratings.com.

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; "Global Criteria for Lenders' Mortgage 
Insurance in RMBS" dated 1 August 2013; "APAC Residential Mortgage Criteria - 
Amended", dated 1 August 2013; and "APAC Residential Mortgage Criteria Addendum 
– Australia - Amended", dated 1 August 2013, are available at 
www.fitchratings.com.

Related Research 

“Representations, Warranties and Enforcement Mechanisms in Global Structured 
Finance Transactions”, dated April 17 2012.

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

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

Representations, Warranties, and Enforcement Mechanisms in Global Structured 
Finance Transactions -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Additional Disclosure 

Solicitation Status 

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=820191

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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.