OREANDA-NEWS. Fitch Ratings has affirmed the ratings for GBS Receivables Trust No.4's Class A1 and A2 notes. The transaction is a securitisation of Australian conforming residential mortgages originated by Greater Building Society Ltd (GBS). The rating action is as follows:

AUD 40.8m Class A1 (ISIN AU3FN0009015) notes affirmed at 'AAAsf', Outlook Stable; and
AUD 5.5m Class A2 (ISIN AU3FN0009023) notes affirmed at 'AAAsf', Outlook Stable

The notes are issued by Permanent Custodians Limited in its capacity as trustee of GBS Receivables Trust No.4.

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 Australia in line with the agency's expectations. The credit quality and performance of the loans in the collateral pools have also remained in line with expectations.

As of December 2015, 30+ days arrears were 0.26%, well below Fitch's 3Q15 Dinkum RMBS Prime Index of 0.91%. Lender's mortgage insurance (LMI) covers 100% of the pool; 70% Genworth Financial Mortgage Insurance Pty Limited (Insurer Financial Strength Rating A+/Stable) and 30% QBE Lender's Mortgage Insurance Ltd (Insurer Financial Strength Rating AA-/Stable). The transaction has experienced no losses to date.

The pro-rata pay-down was triggered prematurely in July 2015 when the available subordination to the Class A1 notes was 18.6%. GBS has advised us the transaction will resume sequential payments in March 2016 until the available subordination for the Class A notes reach above 19%.

RATING SENSITIVITIES
The initial sequential pay-down has resulted in a build-up of credit enhancement levels for the rated notes.

Both Class A1 and A2 notes are independent of downgrades to the LMI provider's ratings. At Fitch's 'AAAsf', the breakeven default rate is 6.37%. The Class A1 notes can withstand an additional 92.3% defaults while the Class AB notes can withstand an additional 33.4% defaults at Fitch's 'AAAsf' loss severity.

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 GBS 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.