Fitch Affirms Ratings of 5 Harvey RMBS Tranches

(The following statement was released by the rating agency)

SYDNEY, January 20 (Fitch) Fitch Ratings has affirmed the ratings of two Harvey 
RMBS transactions, as detailed below. Both transactions are backed by pools of 
Australian conforming residential full-documentation mortgages originated by 
Credit Union Australia Limited. The rating actions are as follows:

Series 2009-1 Harvey Trust (Harvey 2009-1):

AUD162.7m Class A-1 (ISIN AU3FN0007738) affirmed at 'AAAsf'; Outlook Stable;

AUD13.5m Class A-2 (ISIN AU3FN0007746) affirmed at 'AAAsf'; Outlook Stable; and

AUD13.5m Class B (ISIN AU3FN0007753) affirmed at 'BBsf'; Outlook Stable.

Series 2010-1 Harvey Trust (Harvey 2010-1):

AUD261.4m Class A-1 (ISIN AU3FN0010179) affirmed at 'AAAsf'; Outlook Stable; and

AUD26m Class A-2 (ISIN AU3FN0010187) affirmed at 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

The affirmations and stable outlooks reflect Fitch's view that, in line with 
expectations of Australia's economic conditions, available credit enhancement is 
sufficient to support the notes' current ratings. Both the credit quality and 
performance of the loans in the collateral pool have remained in line with 
Fitch's expectations.

As at end-November 2013, 30+ days arrears made up 0.63% and 0.56% of the pools 
backing Harvey 2009-1 and Harvey 2010-1 respectively, below Fitch’s Dinkum Index 
measuring industry-wide performance (1.19%). 

Both transactions have experienced one default each to date, resulting in a loss 
covered mainly by lender’s mortgage insurance (LMI), with the remainder covered 
by excess spread. All loans in the underlying portfolios are covered by LMI, 
with policies provided by Genworth Financial Mortgage Insurance Pty Ltd and QBE 
Lenders Mortgage Insurance Pty Limited (AA-/Stable)..

The pools are relatively geographically concentrated around Queensland, with 
around 45% of each pool located in the state. The geographical distributions and 
seasoning of each pool (both greater than 7 years) resulted in a reduction of 
the Fitch-calculated weighted average loan to value ratios to 52.9% after 
indexation, down from 59.6% before indexation, for Harvey 2009-1, and to 48.4%, 
down from 54.5%, for Harvey 2010-1.

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 
both transactions, which can withstand multiples of the latest reported arrears. 
The rated notes of both transactions are independent of downgrades of the LMI 
providers’ ratings.

Contacts: 

Lead Surveillance Analyst

Ben Newey

Director

+61 2 8256 0341

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 is provided by Credit 
Union Australia 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; "Global Criteria for Lenders' Mortgage 
Insurance in RMBS" dated 1 August 2013; "APAC Residential Mortgage Criteria", 
dated 1 August 2013; and "APAC Residential Mortgage Criteria Addendum - 
Australia", dated 1 August 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

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

Additional Disclosure 

Solicitation Status 

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=815810

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.