OREANDA-NEWS. July 27, 2015. Fitch Ratings has confirmed Pepper Prime 2013-1 Trust's ratings following the issuance of AUD138.4m Class AR-u mortgage backed floating-rate notes. The ratings are as follows:

AUD138.4m Class AR-u notes: 'AAAsf'; Outlook Stable;
AUD92.3m Class A-a notes: 'AAAsf'; Outlook Stable;
AUD25.0m Class AB notes: 'AAAsf'; Outlook Stable;
AUD15.0m Class B notes: Not Rated; and
AUD2.5m Class C notes: Not Rated.

The notes are issued by Permanent Custodians Limited in its capacity as trustee for Pepper Prime 2013-1 Trust.

The 'AAAsf' Long-Term Rating was originally assigned to the Class AR-u tranche with a zero
balance at initial settlement on 14 August 2013. The issuance of AUD138.4m Class AR-u notes, plus application of monies held in the redemption fund (totalling AUD58.1m), have been used to redeem the outstanding Class A-u2 notes at their maturity today.

KEY RATING DRIVERS
The 'AAAsf' Long-Term Rating assigned to the Class AR-u, A-a and AB notes is based on: the quality of the collateral; the 15.6% credit enhancement (CE) provided to the Class AR-u and A-a notes by the subordinate AB, B and C notes; the 6.4% CE provided to the Class AB notes by the subordinate B and C notes; the liquidity facility of 1.5%; the mortgage insurance policies provided by QBE Lenders' Mortgage Insurance Limited ('AA-'/Stable) and Genworth Financial Mortgage Insurance Pty Limited (A+/Stable); and Pepper Group Limited's servicing capabilities.

RATING SENSITIVITIES
Fitch's stress and rating sensitivity analysis is discussed in the new issue report entitled "Pepper Prime 2013-1 Trust", available on www.fitchratings.com. Included as an appendix to the report are a description of the representations, warranties, and enforcement mechanisms (RW&Es).

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 15 sample loan files focusing on the underwriting procedures conducted by Pepper GroupAustralia Pty Limited 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.

A comparison of the 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.