Asset-backed Securities Maintenance
Last updated:The Reserve Bank must be notified of certain changes to asset-backed securities, including self-securitisations. For all eligible asset-backed securities, an application must be submitted to the RBA at least 10 business days before certain events occur. Asset-backed securities with a revolving pool must also provide certain documents annually. Failure to meet these requirements may affect repo eligibility (see Eligible Securities).
Complete the ABS Maintenance Form to notify the Reserve Bank.
Annual document submission
Asset-backed securities with revolving pools must submit a ratings affirmation and insurability attestation letter (if applicable, see Insurability attestation) annually.
Large balance change
The RBA requires a ratings affirmation letter and insurability attestation letter (if applicable) if the pool balance is to be changed by 10% or more in one reporting period. This includes new assets being added to the pool, assets being removed from the pool, or assets being substituted.
ISIN change
When a new ISIN is to be issued from a currently eligible program that must be repo eligible from the issue date, the RBA requires:
- a ratings affirmation and insurability attestation letter (if applicable).
- a successful Securitisation submission with the new ISIN. The submission should report new note balances and new facility balances after the reissuance, including the notional swap principal, liquidity facility, redraw facility, and collections account balance. Loan-level data do not need to be updated until the next report date.
- if any transaction document is to be amended in connection with the ISIN change, additional documents are required for a Legal document change as specified below.
If the existing eligible security is currently held by the RBA under repo and an intraday substitution to the new ISIN is required, the applicant must also follow the timeline in Table 1:
| Time | Action |
|---|---|
| No later than ten business days prior to issuance (t-10) | Complete the ABS Maintenance Form. Register the new ISIN with Austraclear. |
| No later than three business days prior to issuance (t-3) | Test submission in the Industry environment of the Securitisation System once you are notified that the new ISIN is set up in the system. This submission must contain the new ISIN, new note balances, and updated facility balances. Please call Securitisation Support Centre (SSC) on 1800 919 211 before uploading data. This is to ensure SSC can monitor the submission. |
| No later than two business days prior to issuance (t-2) | After 4pm (but before 9:30am t-1): complete a valid submission to the Securitisation system (Production environment) for new ISIN. |
| No later than one business day prior to issuance (t-1) | Email Monetary Policy Implementation to organise substitution of the security with the old ISIN for the security with the new ISIN on any open positions with the RBA. |
| Issuance day (t) |
Provide ratings affirmation letter (if not provided upon application). Arrange for the new ISIN to be captured on rating agency websites. Substitute the newly issued security to replace the security with the old ISIN on any open positions with the RBA. |
Legal document change
The RBA must be informed prior to the amendment of the transaction documents for eligible asset-backed securities. To execute the amending documents, the issuer and/or security trustee may need the RBA's consent or non-objection. This may depend on the terms in the original transaction documents which govern amendments and whether the RBA is a noteholder.
The issuer must provide the draft amendment document(s) and other supporting documents at least 10 business days before the intended execution date. The RBA's consent is typically required where the RBA holds the eligible asset-backed securities under repo, because the RBA holds the beneficial interest in the securities for the duration of the repo.
Table 2 sets out the specific documents that must be submitted to the RBA in each case:
| Supporting documents | What do you require from the RBA? | ||
|---|---|---|---|
| RBA consent | RBA non-objection | No action | |
| A brief explanation of the proposed change | |||
| Draft amendment documents (e.g. draft Amending Deed) | |||
| Ratings affirmation | |||
| Existing transaction documents cross-referenced in the draft amendment documents (e.g. Master Trust Deed, Security Trust Deed etc) | |||
| Consent documents (e.g. Circulating Resolution of Noteholders, Instruction to Vote Form etc) | |||
| Advance notice | 10 business days | The earlier of 10 business days and minimum notice period in transaction documents | 10 business days |
Where new notes are issued as part of the amendments, the explanation must set out a brief summary of the planned transactions, including the amount of notes being bought back and issued, how any note purchase will be funded, and how many notes will be held by each noteholder (including the RBA) pre and post amendment.
Insurability attestation
Insurability attestation letters are only required for asset-backed securities seeking to maintain a standard margin (see Margin Ratios). To receive a standard margin, the pool must comprise at least 90 per cent domestic, full-doc, insurable mortgages.
Insurability attestation letters provide evidence that uninsured mortgages in a pool meet lenders mortgage insurance (LMI) underwriting requirements. The letter must:
- be from a senior officer (Chief Financial Officer, Group Treasurer or equivalent).
- attest that at least 90 per cent of the loans in the pool and future loans purchased by the trust will meet the underwriting standards used to determine the insurability of the pool.
- include the main features of the mortgages and the set of criteria used to assess the insurability of the pool.
- include details of any external due diligence performed on the pool to indicate that the stated details have been verified and are correct.