(The following was released by the rating agency)
SYDNEY, April 04 (Fitch) Fitch Ratings has affirmed Interstar Titanium Series 2006-1 Trust, a securitisation of a pool of non-conforming Australian residential mortgages originated by Interstar Non-Conforming Finance Pty Limited, and sold by Challenger Inventory Financing Servicing Pty Limited, as approved seller. The rating actions are as follows:
AUD6.8m Class B (ISIN AU3FN0002838) affirmed at 'AAsf'; Outlook Stable
AUD14.6m Class C (ISIN AU3FN0002853) affirmed at 'BBBsf'; Outlook Stable
AUD6.2m Class D (ISIN AUSFN0002788) affirmed at 'BBsf'; Outlook Stable
The rating actions reflect Fitch's view that credit enhancement levels are able to support the notes' current ratings. The credit quality and performance of the loans within the collateral pool remains in line with the agency's expectations.
"As of end-January 2012, 30+ day arrears were 16.4%, and have been reasonably stable for the past 12 months. 90+ day arrears are currently 5.8% of the collateral balance, and have averaged 7.3% for the past 12 months. There have been no losses recorded over the last 12 months." said Courtney Miller, Analyst in Fitch's Structured Finance team.
The notes balance is 10.4% of its original outstanding amount and the ratings of the outstanding notes are supported by considerable subordination. The excess reserve has a current balance of AUD1.7m.
As the mortgage portfolio reduces in size, the risk of principal losses resulting from the concentrated default of large loans becomes the primary driver of Fitch's analysis. Currently, the pool comprises 141 loans with a pool balance of AUD30m.