OREANDA-NEWS. Fitch Ratings has assigned final ratings to Triton Trust No.7 Bond Series 2015-1's residential mortgage-backed floating-rate notes. The issuance consists of notes backed by Australian residential mortgages originated by Columbus Capital (Columbus). The ratings are as follows:

AUD 150.0m Class A1 notes: 'AAAsf'; Outlook Stable;
AUD 0m Class A2 notes: 'AAAsf'; Outlook Stable;
AUD 10.55m Class B notes: 'NRsf';
AUD 0m Class C notes: 'NRsf'; and
AUD 4.11m Class D notes: 'NRsf'.

The notes are issued by Perpetual Corporate Trust Limited in its capacity as trustee of Triton Trust No.7 Bond Series 2015-1. The facility limit for the Class A1 & A2 notes will total AUD150m being the Class A Note facility.

At the cut-off date, the pool has 46.5% lenders' mortgage insurance (LMI) cover. The weighted-average (WA) seasoning of the portfolio is 6.2 months, with a WA current unindexed loan/value ratio (CLVR) of 63.4%. Loans with an unindexed LVR greater than 80% account for 19.8% of the pool. The average current loan size is AUD348,677; investment loans represent 33.7% of the pool by balance, and interest-only loans represent 44.0%.

KEY RATING DRIVERS
Sufficient Credit Support: The Class A1 & A2 notes have sufficient credit enhancement of 8.9%, provided by the Class B, C and D notes, and is independent of any credit provided by LMI after the third payment date, whereby the minimum subordination steps up from AUD5.5m to AUD10m

Portfolio: The transaction documents allow for the addition of new receivables to the trust in accordance with the portfolio parameters. The Class A2 note will fund intra month new receivables, with the balance being rolled into the Class A1 note on a monthly basis.

Minimum Subordination Amounts: The transaction requires that a minimum dollar amount of subordination must be met for each rated note at each payment date before principal can be distributed. This feature is particularly important during the pro-rata period and after pool transfers to ensure that there is sufficient subordination in the tail end to cover for losses of large loans.

Adequate Liquidity Support: Liquidity support will be provided via excess spread, a yield reserve, principal draws and a liquidity reserve sized at 0.82% of the mortgage balance which will amortise to a reserve floor of AUD375,000.

RATING SENSITIVITIES
Unexpected decreases in residential property value, increases in the frequency of foreclosures, and loss severity on defaulted mortgages could produce loss levels higher than Fitch's base case, which could result in negative rating actions on the notes.

Fitch evaluated the sensitivity of the ratings assigned to Triton Trust No.7 Bond Series 2015-1 to increased defaults and decreased recovery rates over the life of the transaction.

Its analysis found that the Class A1 and A2 notes' Ratings under Fitch's moderate (15% increase) and severe (30% increase) default and recovery scenarios, as well as a combination of both increased defaults and decreased recoveries were not impacted.

The transaction structure supports an LMI independent rating for the Class A1 and A2 notes after the third payment date, whereby the minimum subordination steps up from AUD5.5m to AUD10m.

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 Columbus compared to their 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.