Fitch Rates Westpac's Series 2013-C4 Tranche 2 Covered Bonds 'AAA'/Stable <Origin Href="QuoteRef">WBC.AX</Origin>

(The following statement was released by the rating agency)

SYDNEY, January 31 (Fitch) Fitch Ratings has assigned Westpac Banking 
Corporation's (WBC, AA-/Stable/F1+) Series 2013-C4 tranche 2 issue of AUD225m 
mortgage covered bonds a rating of 'AAA'. The Outlook is Stable. The fixed-rate 
bond is due in November 2023 and benefits from a 12-month extendable maturity. 
This brings the total issuance of Series 2013-C4 to AUD1.125bn.

KEY RATING DRIVERS

The rating is based on WBC's Long-Term Issuer Default Rating (IDR) of 'AA-', a 
Discontinuity Cap (D-Cap) of 2 (high), and the asset percentage (AP) used in the 
asset coverage test (ACT) of 89.0%. The latter provides a small cushion, 
compared with Fitch’s ‘AAA’ breakeven AP of 89.5%, supporting a ‘AA’ rating on a 
probability of default basis, and a ‘AAA’ rating after giving credit for 
recoveries. The Outlook on the covered bonds reflects the Stable Outlook on 
WBC's IDR.

At end-December 2013, the cover pool consisted of 109,854 loans secured by 
Australian residential first-ranking mortgages, with a total outstanding balance 
of AUD26.6bn and AUD3.4bn of cash. 

Maturity mismatches are significant, with the weighted-average residual life of 
the assets at 16.1 years, and of the liabilities at 4.0 years. 

RATING SENSITIVITIES

The 'AAA' rating would be vulnerable to a downgrade if the issuer's Long-Term 
IDR were to be downgraded by two or more notches; the D-Cap fell by more than 
one category; or the programme's AP rose above the breakeven AP of 89.5%.

Contacts:

Primary Analyst

Claire Heaton

Director 

+61 2 8256 0361

Fitch Australia Pty Ltd.

Level 15, 77 King Street, Sydney NSW 2000

Secondary Analyst

James Leung

Director

+61 2 8256 0322

Committee Chairperson

Ben McCarthy

Managing Director

+61 2 8256 0388

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 Westpac Banking 
Corporation. The issuer has informed Fitch that not all relevant underlying 
information used in the analysis of the rated bonds is public.

Additional information is available at www.fitchratings.com. 

Applicable criteria, 'Covered Bonds Rating Criteria', dated 4 September 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 'APAC Residential Mortgage 
Criteria', dated 1 August 2013; 'APAC Residential Mortgage Criteria Addendum - 
Australia', dated 1 August 2013; 'Covered Bonds Rating Criteria - Mortgage 
Liquidity & Refinance Stress Addendum' dated 3 June 2013; 'Global Criteria for 
Lender's Mortgage Insurance in RMBS', dated 1 August 2013, are available at 
www.fitchratings.com.

Applicable Criteria and Related Research: 

Covered Bonds Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=717321

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

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

Covered Bonds Rating Criteria - Mortgage Liquidity and Refinance Stress Addendum

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709665

Global Criteria for Lenders’ Mortgage Insurance in RMBS

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

Additional Disclosure 

Solicitation Status 

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=818570

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licence no. 337123) which authorises it to provide credit ratings to wholesale 
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be used by persons who are retail clients within the meaning of the Corporations 
Act 2001.

(Repeat for additional subscribers)

Jan 31 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has assigned Westpac Banking Corporation's (WBC, AA-/Stable/F1+) Series 2013-C4 tranche 2 issue of AUD225m mortgage covered bonds a rating of 'AAA'. The Outlook is Stable. The fixed-rate bond is due in November 2023 and benefits from a 12-month extendable maturity. This brings the total issuance of Series 2013-C4 to AUD1.125bn.

KEY RATING DRIVERS

The rating is based on WBC's Long-Term Issuer Default Rating (IDR) of 'AA-', a Discontinuity Cap (D-Cap) of 2 (high), and the asset percentage (AP) used in the asset coverage test (ACT) of 89.0%. The latter provides a small cushion, compared with Fitcha€™s aAAAa€™ breakeven AP of 89.5%, supporting a aAAa€™ rating on a probability of default basis, and a aAAAa€™ rating after giving credit for recoveries. The Outlook on the covered bonds reflects the Stable Outlook on WBC's IDR.

At end-December 2013, the cover pool consisted of 109,854 loans secured by Australian residential first-ranking mortgages, with a total outstanding balance of AUD26.6bn and AUD3.4bn of cash.

Maturity mismatches are significant, with the weighted-average residual life of the assets at 16.1 years, and of the liabilities at 4.0 years.

RATING SENSITIVITIES

The 'AAA' rating would be vulnerable to a downgrade if the issuer's Long-Term IDR were to be downgraded by two or more notches; the D-Cap fell by more than one category; or the programme's AP rose above the breakeven AP of 89.5%.

((Bangalore Ratings Team, Hotline: +91 80 6677 2513, Bhanu.priya@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: Bhanu.Priya.reuters.com@reuters.net))

Keywords: Fitch Rates Westpac's Series 2013 C4 Tranche 2 Cov