OREANDA-NEWS. Fitch Ratings has assigned final ratings to Medallion Trust Series 2011-1's Class A2-R residential mortgage-backed floating-rate notes. The ratings are as follows:

- AUD525m Class A2-R notes (ISIN AU3FN0030771) 'AAAsf'; Outlook Stable.

The Class A2-R notes were issued to refinance the soft bullet Class A2 notes on 22 April 2016. The Class A2 notes (AUD525m) were repaid from issuance of Class A2-R notes, as the Guaranteed Investment Contract account balance was zero.

The Class A2 notes were originally issued in May 2011 as part of an AUD3bn issue by Commonwealth Bank of Australia (CBA, AA-/Stable). The refinance of the Class A2 notes was contemplated in the original issuance and is detailed in Fitch's new issue report, dated 2 May 2011.

The transaction continues to perform in line with Fitch's expectations at origination and has paid down since issuance from AUD3bn to approximately AUD987m.

Ratings for the remaining rated notes are unchanged and were affirmed on 28 January 2016 as follows (balances as at March 2016):
- AUD316.0m Class A1 (ISIN AU3FN0012944) notes at 'AAAsf'; Outlook Stable
- AUD525.0m Class A2 (ISIN AU3CB0173953) notes at 'AAAsf'; Outlook Stable
- AUD57.5m Class AB (ISIN AU3FN0012951) notes at 'AAAsf'; Outlook Stable
- AUD28.7m Class AC (ISIN AU3FN0012969) notes at 'AAAsf'; Outlook Stable.

The Class A2-R notes were issued by Perpetual Trustee Company Limited in its capacity as trustee of Medallion Trust Series 2011-1.

KEY RATING DRIVERS
The 'AAAsf' rating assigned to the Class A2-R notes is supported by the credit enhancement provided by the subordinate Class AB, AC and B notes; the lender's mortgage insurance policies; the liquidity facility, which is equivalent to 3.4% of the outstanding note balance; and CBA's mortgage underwriting and servicing capabilities.

RATING SENSITIVITIES
Unexpected decreases in residential property value, increased foreclosures and loss severity on defaulted mortgages could produce higher losses than Fitch's base case. This could in turn result in a negative rating action on the notes.

Fitch's initial rating drivers and rating sensitivities are discussed in the new issue report, "Medallion Trust Series 2011-1", dated 2 May 2011 and available at www.fitchratings.com

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.

DATA ADEQUACY
Fitch conducted a file review of 10 sample loan files focusing on the underwriting procedures conducted by CBA 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 impact Fitch's rating analysis.