Fitch Affirms Medallion NZ Trust 2009-1R Class A Notes at 'AAAsf'; Outlook Stable
NZD 4.5bn Class A notes affirmed at 'AAAsf'; Outlook Stable
KEY RATING DRIVERS
The affirmations reflect Fitch's view that the available credit enhancement is sufficient to support the notes' current ratings and can withstand deterioration from the current economic conditions in New Zealand in line with the agency's expectations. The credit quality and performance of the loans in the collateral pools also remain in line with expectations.
As of 30 June 2016, 30+ days arrears were low at 0.45% of the underlying mortgage balance, and there have been no losses to date.
The class A notes can withstand an additional 2.7% in defaults at Fitch's 'AAAsf' loss severity using Fitch's 'AAAsf' breakeven default rate of 10.8%.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Form ABS Due Diligence-15E was not provided to or reviewed by Fitch in relation to this rating action.
Fitch conducted a review of 10 sample loan files focusing on the underwriting procedures conducted by ASB compared to its credit policy at the time of underwriting. Fitch checked the consistency and plausibility of the information and no material discrepancies were noted that would impact Fitch's rating analysis.
This transaction has a 10-year revolving period of which less than three years remain. Fitch is comfortable with the long revolving period because ASB's product mix has not materially changed over this time and the portfolio is performing as expected.