OREANDA-NEWS. S&P Global Ratings today assigned its preliminary ratings to five classes of prime residential mortgage-backed securities (RMBS) to be issued by Perpetual Ltd. as trustee for SMHL Series Securitisation Fund 2016-1 (see list). SMHL Series Securitisation Fund 2016-1 is a securitization of prime residential mortgages originated by Members Equity Bank Ltd.

The preliminary ratings reflect:Our view of the credit risk of the underlying collateral portfolio, including our view that the credit support is sufficient to withstand the stresses we apply. The credit support for the rated bonds comprises bond subordination, excess spread and lenders' mortgage insurance (LMI) on 54.3% of the portfolio. Our expectation that the various mechanisms to support liquidity within the transaction, including a liquidity facility equal to 1.0% of the outstanding mortgage balance, the principal draw function, and a spread reserve that builds from available excess spread, after the call date, are sufficient to ensure timely payment of interest. The extraordinary expense reserve of A$150,000 is provided via a cash drawing under the payment funding facility on the closing date to meet extraordinary expenses. The reserve is to be topped up from excess spread, if any, to the extent it has been drawn and has not been reimbursed from an additional payment funding facility draw. The fixed-to-floating interest-rate swaps provided by National Australia Bank Ltd. and Australia and New Zealand Banking Group Ltd. to hedge the mismatch between the fixed-rate receipts on the fixed-rate loans and the floating-rate interest payable on the bonds. A fixed-rate end date of Oct. 4, 2021, in the transaction structure means all fixed-rate loans in the trust must convert to floating rate by the fixed-rate end date.

A copy of S&P Global Ratings' complete report for SMHL Series Securitisation Fund 2016-1 can be found on RatingsDirect, S&P Global Ratings' Web-based credit analysis system, at http://www. globalcreditportal. com.

The issuer has not informed Standard & Poor's (Australia) Pty Limited whether the issuer is publically disclosing all relevant information about the structured finance instruments that are subject to this rating report or whether relevant information remains non-public.

REGULATORY DISCLOSURESPlease refer to the initial rating report for any additional regulatory disclosures that may apply to a transaction.