OREANDA-NEWS. Fitch Ratings has affirmed the ratings of three AFG RMBS transactions. The transactions are securitisations of Australian conforming residential full-documentation mortgages originated by AFG Securities Pty Ltd (AFGS). The notes were issued by Perpetual Corporate Trust Limited, in its capacity as trustee of the Series.

The rating actions are as follows:

AFG 2013-1 Trust:

AUD83.1m, Class A (ISIN AU3FN0018479) affirmed at 'AAAsf'; Outlook Stable

AUD6.8m, Class AB (ISIN AU3FN0018487) affirmed at 'AAAsf'; Outlook Stable

AFG 2013-2 Trust:

AUD90.9m, Class A (ISIN AU3FN0020871) affirmed at 'AAAsf'; Outlook Stable

AUD13.3m, Class AB (ISIN AU3FN0020889) affirmed at 'AAAsf'; Outlook Stable

AFG 2014-1 Trust:

AUD117.7m, Class A (ISIN AU3FN0022984) affirmed at 'AAAsf'; Outlook Stable

AUD12.6m, Class AB (ISIN AU3FN0022992) affirmed at 'AAAsf'; Outlook Stable

KEY RATING DRIVERS

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

At 31 August 2016, 30+ arrears were 0.8%, 0.0% and 1.4% for AFG 2013-1, AFG 2013-2 and AFG 2014-1, respectively. There were no defaults or losses for any of the transactions.

All loans in the pools are covered by lenders' mortgage insurance (LMI), with policies provided by Genworth Financial Mortgage Insurance Pty Limited (Insurer Financial Strength Rating: A+/Stable) and QBE Lenders' Mortgage Insurance Limited (Insurer Financial Strength Rating: AA-/Stable).

The default model was not re-run for this rating action as the outstanding ratings are 'AAAsf' and a review of pre-determined performance triggers indicates the transaction displays stable asset performance.

RATING SENSITIVITIES

Fitch does not expect the ratings to be affected by any foreseeable change in performance. The transaction amortises pro-rata until call option triggers are met. At call, the transaction moves to sequential amortisation, mitigating tail risk. The ratings of the rated notes are LMI-independent and therefore not sensitive to downgrades to the LMI providers' ratings.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of each transaction's representations, warranties and enforcement mechanisms (RW&Es) disclosed in the offering documents that relate to the underlying asset pool is available by accessing the relevant appendix referenced under "Related Research" below. The appendices also contain a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report, Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions, dated 26 March 2015.

DATA ADEQUACY

Fitch conducted a review of 10 sample loan files focusing on the underwriting procedures conducted by AFGS compared to its credit policy at the time of underwriting. Fitch has checked the consistency and plausibility of the information and no material discrepancies were noted that would affect Fitch's rating analysis.