MyState launches another RMBS deal

A securitisation of prime residential mortgages originated by MyState Bank and The Rock Building Society is being shown to institutional investors, and has been given preliminary ratings by Standards & Poor's.

The two highest ranked classes of the six tranches of prime residential mortgage-backed securities, for what is to be known as the Conquest 2014-2 Trust, were assigned 'AAA (sf)' ratings. At launch, these were seeking to raise around A$262 million and 19 million, respectively.

"The preliminary ratings reflect the credit risk of the initial underlying collateral portfolio and the credit support provided by subordination and lenders' mortgage insurance, which is commensurate with that credit risk," S&P wrote in a presale media release.

"The subordination provided to both the class A1 and class A2 notes exceeds our opinion of minimum credit support at the 'AAA (sf)' level."

In addition, an extraordinary expense reserve of A$150,000 will be funded by MyState on the closing date to meet extraordinary expenses. The reserve is to be topped up from excess spread, if any, to the extent it has been drawn.

S&P added that preliminary ratings also take into account the counterparty support provided by BNP Paribas as interest-rate swap provider and CBA as liquidity facility provider.