OREANDA-NEWS. S&P Global Ratings today affirmed its 'AAA (sf)' rating on the residential mortgage-backed securities (RMBS) issued by Perpetual Corporate Trust Ltd. as trustee for Portavia Trust No.2 Series 2013-1R.

The rating affirmation follows the acquisition of approximately A$16.2 million of residential mortgage assets into Portavia Trust No.2 Series 2013-1R, which will be funded by further class A note issuance. This takes the total amount of class A notes issued to A$96.5 million.

The affirmation reflects:Our view of the credit risk of the underlying collateral portfolio, which has a weighted-average current loan-to-value ratio of 52.4% and weighted-average loan seasoning of 50.0 months. Security properties for investment purposes make up 31.7% of the portfolio. Our view is that investment loans are of a more speculative nature and defaults could be more frequent on second homes during periods of economic stress. Based on a 'AAA' rating stress, our assessed minimum credit support is 3.47% after giving credit to lenders' mortgage insurance. The note subordination provided for the class A notes is equal to at least 4.36%, which exceeds the minimum amount that we assess as being commensurate with the rating level. As such, it is sufficient to withstand the stresses commensurate with the rating. S&P Global Ratings' assessment of credit risk takes into account originator and servicer Gateway Credit Union Ltd.'s underwriting standards, processes, and servicing quality, which are consistent with industry-wide practices. Our expectation that the liquidity facility, equal to 3.3% of the bonds outstanding within the transaction, is adequate under our stress assumptions to cover timely payment of interest. The benefit of a fixed-rate swap provided by Westpac Banking Corp. to hedge fixed-rate loans in the mortgage pool.