OREANDA-NEWS. Fitch Ratings has affirmed Tombac No. 1 plc as follows:

Class A1 (ISIN XS1055472424) affirmed at 'AAAsf'; Outlook Stable.
Class A2 (ISIN XS1055475872) affirmed at 'AAAsf'; Outlook Stable.

The transaction is a securitisation of prime UK residential loans originated by Accord Mortgages, a wholly owned subsidiary of Yorkshire Building Society (YBS; A-/Stable/F1).

KEY RATING DRIVERS
Strong Asset Performance
Asset performance remains strong with loans in arrears by more than three months (0.04%) comfortably outperforming Fitch's index of 0.81%. The performance is primarily driven by the high level of prepayments (12 month average of 30%) as borrowers refinance at the end of their fixed rate period, avoiding the reversion to Accord's Standard Variable Rate (SVR) of 5.79%.

Unhedged Rate Risk
There is no instrument in place to offset the mismatch between the reference rate of the assets (95.7% fixed, 3.9% SVR, 0.4% BBR) and the rated notes (which pay a fixed coupon). There is currently a natural hedge as the loans are predominantly fixed rate. However, 95% of the current portfolio will revert to Accord's SVR by the end of 2018. Fitch has stressed the SVR by reducing it to GBP LIBOR + 2.5% in line with its criteria and adjusted the excess spread accordingly in its analysis. There is sufficient credit enhancement at the 'AAAsf' level to withstand this stress.

Commingling Risk
The collection account bank is NatWest (BBB+/Stable/F2) from which there is a daily sweep to the issuer account at YBS. The replacement trigger in place for the issuer account bank is 'BBB-'/'F2'. As neither the collection account bank's ratings nor the issuer account bank's trigger levels are sufficient to support a 'AAAsf' ratings, two months of commingling loss exposure has been factored into the analysis in line with the analysis at closing. The credit enhancement available to the class A notes is robust enough to withstand this stress.

Geographic Concentration
30.4% of the pool is based in Greater London. As the concentration is greater than twice the proportion of the population in the area, a 15% adjustment has been applied to the weighted average foreclosure frequency for this portion of the pool, in line with Fitch's criteria

RATING SENSITIVITIES
Adverse asset performance due to macroeconomic factors may lead to an increase in defaults. This may erode the credit enhancement available to the rated notes and lead to negative rating action.

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 transactions. There were no findings that were material to this analysis. 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.

Prior to the transaction closing, Fitch reviewed the results of a third party assessment conducted on the asset portfolio information, which indicated no adverse findings material to the rating analysis.

Prior to the transaction closing, Fitch conducted a review of a small targeted sample of Accord's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio.

Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis.
Loan-by-loan data provided by YBS as at 31 December 2015
Transaction reporting provided by YBS as at 31 December 2015
Discussions with the servicer dated 29 February 2016