Fitch Affirms Ratings of 3 AIMS RMBS Transactions

(The following statement was released by the rating agency)

SYDNEY, February 05 (Fitch) Fitch Ratings has affirmed the ratings of three AIMS 
RMBS transactions, as detailed below. The transactions are securitisations of 
first-ranking Australian residential mortgages originated by AIMS Home Loans Pty 
Limited and Loancorp Pty Limited. The rating actions are as follows:

AIMS 2004-1 Trust:

AUD15.8m Class A3 (ISIN AU300AIM2035) affirmed at 'AAAsf'; Outlook Stable; and

AUD18m Class B (ISIN AU300AIM2043) affirmed at 'Bsf'; Outlook Stable.

AIMS 2005-1 Trust:

AUD26.5m Class A (ISIN AU300AIM3017) affirmed at 'AAAsf'; Outlook Stable; and

AUD12.8m Class B (ISIN AU300AIM3025) affirmed at 'Bsf'; Outlook Stable.

AIMS 2007-1 Trust:

AUD32.2m Class A (ISIN AU3FN0002663) affirmed at 'AAAsf'; Outlook Stable; and

AUD16.3m Class B (ISIN AU3FN0002671) affirmed at 'Bsf'; Outlook Stable.

KEY RATING DRIVERS

The affirmations reflect Fitch's view that available credit enhancement is 
sufficient to support the senior notes' current ratings, and the agency's 
expectations of Australia's economic conditions. The Class B ratings for all 
three transactions benefit from lenders' mortgage insurance (LMI) and excess 
spread levels. The credit quality and performance of the loans in the collateral 
pools has remained in line with expectations.

Principal collections are being allocated sequentially, benefiting the senior 
notes by increasing credit enhancement over the life of the transactions.

As at end-November 2013, 30+ days arrears made up 2.83%, 6.60%, and 2.95% for 
AIMS 2004-1 Trust, AIMS 2005-1 Trust and AIMS 2007-1 Trust respectively, 
although these figures tend to be volatile due to the relatively small size of 
the pools. Arrears levels were above Fitch's 30+ Days Dinkum Index measuring 
industry-wide performance (1.19% as of September 2013). 

AIMS 2005-1 and AIMS 2007-1 each experienced a single default over the year to 
November 2013, resulting in single losses of AUD36,177 and AUD164,719 
respectively. All losses were covered by LMI and excess spread. There were no 
defaults in AIMS 2004-1 over the period.

The transactions are well seasoned at around ten, nine, and eight years 
respectively. As a result, the Fitch calculated weighted average indexed loan to 
value ratios were 47.8%, 53.3% and 58.4% respectively, compared to 57.2%, 62.1% 
and 65.4% before indexation.

All loans contained in the collateral pools have LMI in place, with policies 
being provided by QBE Lenders' Mortgage Insurance Limited (Insurer Financial 
Strength 'AA-'/Stable), and Genworth Financial Mortgage Insurance Pty Ltd. Any 
losses not covered by LMI policies to date have been covered by excess spread.

RATING SENSITIVITIES

A significant and unexpected increase in delinquencies, defaults and losses 
would be necessary before any negative rating action would be considered on the 
transactions' senior notes. Credit enhancement will continue to build as the 
transactions amortise.

A downgrade of the Class B notes is considered unlikely due to the support 
provided by the LMI providers, positive excess spread levels, and the high 
seasoning of each pool. There have been no charge offs to date on the Class B 
notes.

Contacts:  

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      

 

The source of information used to assess these rating was the servicer, AIMS 
Home Loans Pty 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, "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.

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

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=819731

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AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF 
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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.