Regional bank’s $782m RMBS rated ‘highest quality’ by Moody’s

Moody’s Investors Service last week assigned Bendigo and Adelaide Bank’s $782 million class A1 notes, of its Torrens Series 2017-1 Trust, a rating of Aaa (sf).

Obligations rated Aaa by Moody’s are judged to be of the “highest quality, subject to the lowest level of credit risk”.

The $28 million Class A2 Notes, $17 million Class AB Notes, $11 million Class B Notes, $5 million Class C Notes and $4 million Class D Notes are not rated by Moody's.

In explaining the rationale for the rating, Moody’s explained that it takes into account, among other factors, the experience of Bendigo and Adelaide Bank in servicing residential mortgage portfolios.

“This is BEN's 34th securitisation, which highlights BEN's experience as a manager and servicer of securitised transactions,” Moody’s said.

It added: “Moody's expected loss for this transaction is 0.50 per cent prior to LMI benefit.”

Further, Moody’s highlighted that one of the key transactional and pool features of the RMBS is that the portfolio exhibits some “geographical over-concentration” in South Australia (22.1 per cent) due to the nature of the bank’s third-party distribution network.

[Related: Regional bank prices $700m RMBS transaction]