OREANDA-NEWS. Fitch Ratings has affirmed 10 classes of notes from four Progress RMBS series. The transactions are securitisations of Australian conforming residential mortgages originated by AMP Bank Limited. The notes were issued by Perpetual Corporate Trust Limited, in its capacity as trustee of the Series. The full list of rating actions can be found at the end of this commentary.

KEY RATING DRIVERS
The affirmations reflect Fitch's view that the 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.

Lender's mortgage insurance (LMI) is provided by Genworth Financial Mortgage Insurance Pty Ltd (Insurer Financial Strength Rating: A+/Stable) and QBE Lenders' Mortgage Insurance Limited (Insurer Financial Strength Rating: AA-/Stable). Historically, loans assigned to the Trust on settlement date had 100% LMI cover, however, loan restructures have resulted in a change in LMI status. To the extent that the loans are not insured then any losses incurred on these loans will be considered a breach of AMP Bank's servicer representations and warranties and will be covered by AMP Bank Limited. Progress 2010-1 Trust, Progress 2012-1 Trust, Progress 2012-2 Trust and Progress 2014-2 Trust have LMI covering 99.75%, 99.76%, 99.82% and 99.89% of their respective current pool balance.

The weighted average current loan/value ratios (LVRs) for the Progress transactions ranged between 57.5% (Progress 2010-1 Trust) to 64.3% (Progress 2014-2 Trust). The pools benefit from indexation with WA indexed LVRs ranging from 48.1% (Progress 2010-1 Trust) to 58.7% (Progress 2014-2 Trust). All four pools are geographically diversified.

At 30 September 2015, 30+ day arrears for Progress 2012-1 Trust and Progress 2014-2 Trust were 0.4% and 0.5% respectively, below Fitch's Dinkum index 30+ day arrears of 1.12%. Progress 2010-1 Trust and Progress 2012-2 Trust's arrears are 1.18% and 1.25% respectively, and were above the Dinkum index 30+ day arrears.

At 30 September 2015, only Progress 2010-1 Trust and Progress 2012-1 Trust had recorded losses. Progress 2010-1 Trust experienced three losses accounting for 0.11% of the original pool balance. One loss was covered by LMI and excess spread while the other two losses were fully covered by the seller due to breaches in the seller/servicer's representations and warranties. Progress 2012-1 Trust had one loss, for 0.02% of the original pool balance, which was also fully covered by the seller due to breaches in the seller/servicer's representations and warranties.

RATING SENSITIVITIES
The prospect for downgrades is considered remote and sequential pay-down has increased credit enhancement for the senior notes of the four transactions.

For Progress 2010-1 Trust, Fitch's 'AAAsf' breakeven default level is 7.80%. The Class A and AB notes can respectively withstand an additional 53.49% and 10.77% in default levels at Fitch's 'AAAsf' loss severity.

For Progress 2012-1 Trust, Fitch's 'AAAsf' breakeven default level is 8.37%. The Class A and AB notes can respectively withstand an additional 52.23% and 13.56 % in default levels at Fitch's 'AAAsf' loss severity.

For Progress 2012-2 Trust, Fitch's 'AAAsf' breakeven default level is 8.55%. The Class A and AB notes can respectively withstand an additional 56.87% and 17.96 % in default rates at Fitch's 'AAAsf' loss severity.

For Progress 2014-2 Trust, Fitch's 'AAAsf' breakeven default rate is 9.96%. The Class A and AB notes can respectively withstand an additional 33.06% and 7.17 % in defaults at Fitch's 'AAAsf' loss severity. The Class B and C notes can respectively withstand an additional 6.33% and 2.69% in defaults at Fitch's 'AA-sf' and 'Asf' loss severity.

All of the notes are LMI independent except for the Class AB, B and C notes of Progress Trust 2014-2 which are LMI dependent.

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 AMP Bank 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 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 given under Related Research below.

The rating actions are as follows (balance as of September 2015):

Progress 2010-1 Trust:
AUD196.0m, Class A (ISIN AU0000POBHA3) affirmed at 'AAAsf'; Outlook Stable
AUD26.7, Class AB (ISIN AU0000POBHB1) affirmed at 'AAAsf'; Outlook Stable

Progress 2012-1 Trust:
AUD218.9, Class A (ISIN AU3FN0015616) affirmed at 'AAAsf'; Outlook Stable
AUD24.9m, Class AB (ISIN AU3FN0015624) affirmed at 'AAAsf'; Outlook Stable

Progress 2012-2 Trust:
AUD302.4m, Class A (ISIN AU3FN0016473) affirmed at 'AAAsf'; Outlook Stable
AUD32.0m, Class AB (ISIN AU3FN0016481) affirmed at 'AAAsf'; Outlook Stable

Progress 2014-2 Trust:
AUD670.2m, Class A (ISIN AU3FN0025672) affirmed at 'AAAsf'; Outlook Stable
AUD48.0m, Class AB (ISIN AU3FN0025680) affirmed at 'AAAsf'; Outlook Stable
AUD21.0m, Class B (ISIN AU3FN0025698) affirmed at 'AA-sf'; Outlook Stable
AUD6.0m, Class C (ISIN AU3FN0025706) affirmed at 'Asf'; Outlook Stable.