Liberty Series 2018-3 Trust: 10 October 2018
A similar transaction to earlier Liberty deals, it being another closed-end securitisation of nonconforming and prime residential mortgages, where the Housing Loans and the Related Securities were originated by the Trust Originator in the ordinary course of its lending business across a range of geographic regions and demographic sectors. The Housing Loans are made to Australian resident borrowers considered to be prime borrowers and also to those considered to fall outside of the lending parameters of traditional lenders. The Housing Loans are secured by first ranking mortgages over residential property.
Once again, the originator has included a Euro-denominated tranche (A1c).
At the cut-off date the portfolio comprised 1,855 loans, where 1,754 were subject to a full verification process, and 101 to an alternative verification process. Loan Classification (by current balances): residential – 69.87%, investment – 30.13%. Repayment type (by current balances): Principal & Interest – 91.29%, Interest Only then Principal & Interest – 8.71%.Interest type: variable – 93.25%, fixed then variable – 6.75%. The WA current LTV is 70.2% and the WA seasoning is a low 3.3 months. Regional concentration: Victoria Metro – 34.82%, NSW Metro – 27.09%, NSW Non Metro – 9.46% and Queensland Metro – 6.57%.
EU Risk Retention: Liberty Financial in favour of Liberty Funding, each Joint Lead Manager and the Class A1c Note Trustee has irrevocably and unconditionally undertaken to retain, on an ongoing basis for so long as any note remains outstanding, a net economic interest in the transaction by retention of randomly selected exposures, equivalent to no less than 5% of the nominal value of the securitised exposures measured as at the Issue Date.
US Risk Retention: No person intends to retain a risk retention interest contemplated by the final rules implementing the credit risk retention requirements of Section 941 of the Dodd-Frank Act (the “U.S. Risk Retention Rules”) in connection with the transaction described in the Offering Circular in reliance on the Foreign Safe Harbor.
Compare/contrast: Liberty Series 2017-4 Trust