OREANDA-NEWS. Fitch Ratings has maintained Finance for Residential Social Housing (Fresh) PLC's Series 1 notes on Rating Watch Negative (RWN) and withdrawn the ratings on the Series 2 notes, as follows:

Series 1 Class A1 notes: 'BBB+sf'; RWN maintained
Series 1 Class A2 notes: 'BBB+sf'; RWN maintained
Series 1 Class A3 notes: 'BBB+sf'; RWN maintained
Series 1 Class B notes: 'BBBsf'; RWN maintained

Series 2 Class A notes: 'BBB+sf'; RWN; withdrawn
Series 2 Class B notes: 'BBBsf'; RWN; withdrawn

Fresh is a securitisation of housing loans originated by The Housing Corporation, Housing for Wales Tai Cymru and the Public Works Loan Board, to housing associations in England and Wales. The Series 1 notes are backed by fixed-rate loans while the Series 2 notes are backed by variable-rate loans.

KEY RATING DRIVERS
The ratings for the Series 1 notes remain on RWN pending clarification of the repayment of the premium ledger. While the transaction servicer (RBS) has provided substantial information on the calculation and effects on the principal deficiency ledger of Series 1 premium interest and premium amount, a number of follow up points concerning the premium ledger remain outstanding and their clarification is necessary for Fitch to complete its analysis.

The Series 1 notes were issued at a significant premium to the par value. This is expected to be repaid over the life of the transaction using available revenue. At the last reporting date, the balance of the premium outstanding for the Series 1 A1, A2, A3 and B notes was GBP115m, GBP14.7m, GBP5.4m and GBP4.9m, respectively. The total balance of premium reduction in the last six month reporting period for all Series 1 classes was GBP3.3m.

Fitch has withdrawn the ratings of Series 2 notes for commercial reasons and because at least one of the housing associations have decided to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings for Series 2.

RATING SENSITIVITIES
Fitch is currently uncertain about the likelihood that all payments, including the premium, will be made to each note class. The agency is seeking clarification of the amounts paid and payable to the premium ledger and if the level of certainty over future payments does not improve, the ratings may be withdrawn. RBS has indicated a willingness to work with Fitch to resolve this in a timely manner and we expect to resolve the RWN within three months.

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

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transaction. Prior data issues have now been resolved and the only limitations material to this analysis remain in relation to the premium ledger, as discussed above.

Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the transaction's initial closing. The subsequent performance of the transaction over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable.

Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies - save for the above mentioned reporting issues, which are being addressed - indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis.
- Loan-by-loan data on each of the Series 1 and 2 provided by RBS as at end-September 2015.
- Transaction reporting provided by RBS as at September 2015 (latest available investor report, reporting is semi-annual)