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Liberty Financial’s $300m RMBS gets rated
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Liberty Financial’s $300m RMBS gets rated

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Reporter 2 minute read

Moody’s Investor Service has provided top definitive ratings to $255 million of Liberty Financial’s latest residential mortgage-backed securities (RMBS) issue.

The non-bank lender launched its second non-conforming and prime residential RMBS of 2018, called Liberty Series 2018-2, valued at $300 million.

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The funding is being raised via six classes of securities, with the majority, or $255 million, being raised through class A notes.

Liberty Financial’s class A and class B securities received a triple A rating from Moody’s.

The notes will be repaid on pro-rata amortisation where principal is allocated across all but class F notes, the ratings agency said.

In terms of risk, Moody’s noted that the portfolio has a “relatively high” weighted-average loan-to-value ratio (LVR) of 70.1 per cent, with 14.7 per cent of the loans with a scheduled LVR higher than 80 per cent and a further 9.4 per cent above 90 per cent.

Further, 7.7 per cent of the loans in the portfolio were extended on an alternative documentation basis, and 0.1 of a percentage point on a low documentation basis, according to the ratings agency.

Moody’s additionally noted that the portfolio has a “low” weight-average seasoning of 3.9 months, with 74.9 per cent of the portfolio originated in the last six months.

The transaction also features a liquidity reserve valued at 3 per cent of the invested amount, with a floor of $600,000 to be funded from the initial proceeds generated from the securities issue. 

The ratings agency did not rate the remaining classes B ($18.6 million), C ($8.4 million), D ($5.1 million), E ($4.8 million) and F ($8.1 million).

Liberty Financial’s first non-conforming and prime residential RMBS of the year, managed by Westpac and Credit Suisse, was increased from $400 million to $450 million, with the majority of the classes highly rated.

[Related: Liberty’s first prime and non-conforming RMBS for 2018 receives rating]

Liberty Financial’s $300m RMBS gets rated
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