OREANDA-NEWS. Fitch Ratings has affirmed the rating of Medallion NZ Series Trust 2009-1R, a securitisation of first-ranking New Zealand residential mortgages originated by ASB Bank Limited (ASB, AA-/Stable/F1+), as follows:

NZD4bn Class A notes affirmed at 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS
The affirmation reflects Fitch's view that available credit enhancement is sufficient to support the notes' current ratings, and the agency's expectations of New Zealand's economic conditions. The credit quality and performance of the loans in the collateral pool has remained in line with expectations.

At end-June 2015, 30+ days arrears were low at 0.46% of the underlying mortgage balance, and there have been no losses to date. The proportion of the pool backed by collateral located in the Auckland region increased to 61.2%, up from 59.7% at end-March 2015.

RATING SENSITIVITIES
The transaction is sensitive to increases in defaults. However, the analysis excludes credit to excess spread, which has been strong and stable.

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 ASB compared to ASB's 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.

This transaction has a 10 year revolving period of which less than four years remain. Fitch is comfortable with the long revolving period because the portfolio stratifications have not changed significantly since initial issue, ASB's product mix has not materially changed over this time, and the portfolio is performing as expected.

A comparison of the transaction's representations, warranties and enforcement mechanisms (RW&Es) to those of typical RW&Es for this asset class is available by accessing the reports and/or links under Related Research below.