NEWS


HERITAGE BANK RETAIL BONDS’ BBB+ CREDIT RATING WITHDRAWN
Thursday, June 22, 2017


Melbourne, 22 June 2017– Australia Ratings has withdrawn its credit rating of ‘BBB+’ to the Heritage Bank Retail Bonds.   A ‘BBB+’ rating indicates a fixed income portfolio has a moderate level of protection against loss arising from credit risk.

Australia Ratings has also withdrawn its Product Complexity Indicator (PCI) of ‘GREEN’ which indicated that the terms and conditions of the Bonds were simple and straightforward. The rating and PCI have been withdrawn following the maturity and repayment of the bonds in June 2017.

The Heritage Bank Retail Bonds issue was part of Heritage’s funding and capital management strategy. The Bonds’ interest rate was fixed at 7.25% per annum payable quarterly in arrears. The Bond were due to mature in June 2017 with an original maturity of five years.

 

For more information contact:
Chris Dalton, Managing Director
chris.dalton@australiaratings.com
0403 584 600
03 8080 6684

About Australia Ratings

Australia Ratings is Australia’s local credit rating agency with over 55 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.

 

ARTESIAN CORPORATE BOND FUND ‘A-‘ CREDIT RATING AFFIRMED
Tuesday, May 23, 2017


Melbourne, Tuesday, 23 May 2017 – Australia Ratings affirmed its ‘A-‘ credit rating to the Artesian Corporate Bond Fund (the Fund) Class A and B units, following several changes to the Fund’s terms and administrative arrangements.

Australia Ratings also confirmed its product complexity indicator of ‘BLUE’ to the Fund’s units, indicating that an investment in the Fund represents a relatively simple financial investment.

An investment in the Fund represents a purchase of units in a registered managed investment scheme. The Fund’s objective is to earn a return above the RBA Cash Rate plus 2.75% (net of the ordinary costs of the Fund as apportioned to the two classes of units).

The ‘A-‘ rating reflects the Fund’s strong degree of protection against loss from credit risk. The Fund’s assets are of a credit quality that supports its ability to meet redemption requests. The ‘A-‘ rating also reflects the planned direction of the credit quality of the portfolio as funds under management grow and the Fund reaches its critical threshold.

The credit rating reflects the following key strengths of Artesian Corporate Bond Fund:

  • focuses on investment grade fixed and floating securities issued by Australian companies or registered foreign companies.;
  • at least 90% of the funds will be invested in investment grade securities rated BBB- or higher;
  • a conservative risk appetite focusing on large floating rate exposure to manage interest rate risk.

The credit rating also reflects the following key risks to the Artesian Corporate Bond Fund:

  • future adverse credit market conditions could affect the unit value and credit quality of the portfolio
  • the Fund currently has a concentrated portfolio and small investor base
  • the rating reflects analysis based on the Fund’s Investment Management Agreement which permits certain exceptions while the funds under management reaches a critical threshold

A full rating report is available from www.australiaratings.com/rating-reports.

For more information contact:
Chris Dalton, Managing Director
0403 584 600
03 8080 6684

 

About Australia Ratings Australia Ratings is Australia’s local credit rating agency with over 55 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138. Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.

SANDHURST STRATEGIC INCOME FUND’S RATING UPGRADED TO ‘A+’
Monday, May 15, 2017


 

Melbourne, 15 May 2017– Australia Ratings has upgraded its credit rating of ‘A’ to ‘A+’ to Sandhurst Strategic Income Fund’s Class A and Class B units (“the Fund”).

The one notch upgrade reflects the strong level of creditworthiness of the Fund; the historical performance of the Fund; and the solid performance of the investment management team in managing the Fund.

Australia Ratings analyst Renee Corcoran said “Investors in the Fund benefit from a high quality diversified portfolio of term deposits and fixed income securities with low volatility risk in asset value changes due to changes in interest rates. Over the last 12 months, greater emphasis has been placed on shorter term, more liquid securities.”

Ms Corcoran added “The consistent strengthening of the underlying credit quality of the portfolio has been a main driver for the Fund’s rating upgrade. The portfolio management team has also continued to actively and conservatively manage the portfolio.”

A rating of ‘A+’ represents that the Fund has a strong degree of protection against loss from credit risk on the rating scale used by Australia Ratings for fixed income funds. The rating primarily reflects the credit quality of the Fund’s investments and the experience and skill of Sandhurst Trustees Limited’s Fund Management team.

Sandhurst Strategic Income Fund was launched in July 2011 and is part of the Bendigo Wealth division and a wholly-owned subsidiary of Bendigo and Adelaide Bank Group.

The units provide investors with a quarterly distribution of income and a return of principal via a redemption request. Australia Ratings has also confirmed its Product Complexity Indicator of ‘BLUE” to the Fund’s units to indicate that an investment in the units represents a relatively simple type of fixed interest investment. The BLUE indicator highlights that in certain exceptional circumstances the Fund may defer redemption requests to manage its liquidity.

A full rating report is available from  www.australiaratings.com/rating-reports.

For more information contact:

Renee Corcoran, Director, Australia Ratings
Phone: 03 8080 6684

 

About Australia Ratings

Australia Ratings is Australia’s local credit rating agency with over 55 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.

 

MASON STEVENS CREDIT FUND’s ‘BBB’ CREDIT RATING WITHDRAWN
Friday, May 05, 2017


Melbourne, 5 May 2017 – Australia Ratings has withdrawn its credit rating of ‘BBB’ to the Fund’s units. A ‘BBB’ rating indicates a fixed income portfolio has a moderate level of protection against loss arising from credit risk.

Australia Ratings has also withdrawn its Product Complexity Indicator (PCI) of ‘YELLOW” which indicates that the terms and conditions of an investment represents a complex type of investment. The rating and PCI have been withdrawn at the request of the manager of the Mason Stevens Credit Fund.

Mason Stevens Credit Fund was launched in 2013 and aims to generate a return of 3.5% above the Cash Rate by investing in securities that generate both income and yield. The units provide investors with a quarterly distribution of income and a return of principal via a redemption request.

 

For more information contact:

Chris Dalton, Managing Director
chris.dalton@australiaratings.com
0403 584 600
03 8080 6684

 

About Australia Ratings

Australia Ratings is Australia’s local credit rating agency with over 55 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.

‘SUPERIOR’ OCA RANKING AFFIRMED TO ASSETWATCH TRADE RECEIVABLES PLATFORM
Tuesday, February 28, 2017


Melbourne, 28 February 2017 – Australia Ratings has affirmed its Operational Capability Assessment (OCA) to AssetWatch as ‘Superior’.

A ‘Superior’ operational capability ranking reflects AssetWatch’s operational and technical quality as a platform used to fund and manage trade receivable portfolios.

AssetWatch is an automated system that requires minimal manual intervention and includes comprehensive in-built quality controls and risk management features.

Australia Ratings analyst, Philip Bayley said “AssetWatch is a platform that is highly automated which eliminates a number of potential risks that may arise in a manual receivables management system. The platform has comprehensive system support allowing for efficient management and collection of trade receivables.” Mr Bayley added, “The controls built into the AssetWatch system are considered to be superior to those seen in similar systems elsewhere. Moreover, the experience of the management team and the extensive track record of the platform were also factors in affirming AssetWatch’s ‘Superior’ ranking.”

AssetWatch is a trade receivables platform that is owned and operated by Assetsecure Pty Limited (Assetsecure) and has been in operation for over 12 years. Assetsecure is a niche arranger of trade receivables financing among a disparate and diminishing group of trade receivables finance providers. Assetsecure also uses securitisation financing techniques to fund receivables purchase facilities ranging from $5 million to $100 million in size, with clients spread across industry sectors such as logistics, fuel wholesaling, automotive, equipment hire and manufacturing. AssetWatch contains a range of comprehensive controls, error detectors and risk management measures.

A full ranking report is available from www.australiaratings.com.

Find out more about Australia Ratings’ Operational Capability Assessments by visiting www.australiaratings.com

Download Media Release

For further information contact:

Chris Dalton, Managing Director
0403 584 600 
03 8080 6684

Philip Bayley, Director 
03 8080 6684

 

 

About Australia Ratings

Australia Ratings is Australia’s local credit rating agency with over 55 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138. 

 

LA TROBE FINANCIAL ASSET MANAGEMENT LTD’S OPERATIONAL CAPABILITY RANKING UPGRADED TO ‘VERY STRONG’
Thursday, February 16, 2017


Melbourne, 16 February 2017 – Australia Ratings has upgraded La Trobe Financial Asset Management’s (LFAM) operational capability assessment (OCA) from ‘Strong’ to ‘Very Strong’.

LFAM’s ‘Very Strong’ ranking reflects its sound governance, risk management and compliance frameworks, and its experienced and focussed staff. The upgrade also points to LFAM’s prudent management to protect investor capital and interest, and the continued solid support from its parent and related entities within the La Trobe Financial Group of Companies.

Australia Ratings analyst Daniela Crisafi said, “the upgrade to ‘Very Strong’ was driven by LFAM’s continued focus to prudently manage The La Trobe Australian Credit Fund (Fund) and foster its growth and performance to current levels, whilst preserving investor capital.” Ms Crisafi added, “whilst arrears on loans remains a key risk, LFAM’s policy and practice of managing asset quality and performance has led to arrear levels that are comparable to industry performance.”

LFAM is the Responsible Entity for The La Trobe Australian Credit Fund; is wholly owned by La Trobe Financial Pty Limited and forms part of the La Trobe Financial Group of companies. The La Trobe Financial Group’s key business as a credit specialist is to originate mortgages and offer investors (institutional and retail) an opportunity to invest in mortgages and other credit assets, including mortgage-backed securities via the Fund.

A full ranking report is available from www.australiaratings.com.

Find out more about Australia Ratings’ Operational Capability Assessments by visiting www.australiaratings.com

For more information contact:

Chris Dalton, Managing Director
chris.dalton@australiaratings.com
03 8080 6684

Daniela Crisafi, Director
daniela.crisafi@australiaratings.com
03 8080 6684

 

 

 

 

About Australia Ratings

Australia Ratings is Australia’s local credit rating agency with over 55 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138. 

 

ASX-LISTED DEBT SECURITIES INDICES REVIEW TO 2016
Friday, January 13, 2017


The search for yield and lack of supply drive investors’ returns in 2016 and may do so again in 2017

Melbourne, 13 January, 2017 – Australia Ratings’ review of its ASX-listed debt securities indices shows contrasting performance between 2015 and 2016.

Investors in ASX-listed debt securities have enjoyed strong returns in 2016. This comes as compensation for the poor returns experienced in 2015 and reflects the opposing forces driving the market in each year.

Philip Bayley, Director noted that the search for yield, as interest rates continued to fall, and a lack of supply as redemptions exceeded new issues, particularly towards the end of the year, drove up prices among listed debt securities in 2016.

It seemed 2015 suffered a hangover from the excesses of 2014 and earlier years. New issues had been abundant and credit margins had been steadily compressed,

This culminated in October 2014, when the Commonwealth Bank listed the $3.0 billion PERLS VII (CBAPD) hybrid notes, paying a credit margin of just 280bps over the 90 day bank bill rate. This was the largest issue and the tightest credit margin the market had seen, and it hasn’t been repeated since.

Credit margins widened throughout 2015 and into 2016, as the market digested supply and repriced credit risk. As a result, total returns to listed debt investors in 2015, ranged from modest to negative. Security prices generally fell over the year and positive total returns required distributions paid to exceed the fall in the price of the securities held.

Australia Ratings’ Combined index for ASX-listed debt securities shows a return of 8.04% for 2016. In 2015, the return was a negative 0.75%.

Read Philip Bayley’s full review of Australia Ratings ASX listed debt securities indices performance over 2015 and 2016 and his outlook for 2017.

For more information about Australia Ratings’ listed debt securities Indices, visit www.australiaratings.com/services/indices.


 

HERITAGE BANK RETAIL BONDS’ 'BBB+' RATING REVIEWED AND AFFIRMED
Tuesday, November 22, 2016


Melbourne, Tuesday, 22 November 2016 – Australia Ratings has reviewed and affirmed its credit rating of ‘BBB+’ of the Heritage Bank Retail Bonds (the Bonds). This rating is the highest long-term rating in the intermediate category of creditworthiness on the rating scale of Australia Ratings. The Bonds are senior and unsecured debt obligations of Heritage Bank Limited. 

Australia Ratings also confirmed its product complexity indicator of ‘GREEN’ on the Bonds, indicating the Bonds to be a debt investment with simple and straight forward terms and conditions. A coupon of 7.25% p.a. is payable quarterly in arrears until maturity of the Bonds in June 2017.

Australia Ratings’ credit analyst, Chris Dalton said “the ‘BBB+’ rating of the Bonds reflects the credit quality of Heritage Bank”. Mr Dalton added “earnings and profitability increased in financial year 2016 in line with expectations and reflects ongoing competition in the residential loan market. Heritage’s performance in keeping down arrears remains exemplary with only 0.30% of loans in arrears as at 30 June 2016. Heritage continues to execute a consistent business strategy. Based on the current economic outlook and the business and financial risk profile of Heritage, the rating is expected to remain unchanged before the bonds’ maturity date in 2017”.

The credit rating reflects the following key strengths of Heritage Bank’s business:

  • a high quality, low risk portfolio of residential mortgages with below industry average arrears and losses;
  • a conservative risk appetite with regard to maintaining capital and liquidity above regulatory capital requirements; and
  • a diversified funding base with experience and capability in raising funds via both wholesale and retail markets.

The credit rating also reflects the following key risks to Heritage Bank’s business:

  • a slowing of demand and increased competition in the residential mortgage market which may constrain earnings growth; and
  • a reliance upon retained earnings to build capital base for future asset growth; and geographic concentration of the mortgage loan portfolio in Queensland.

A GREEN Product Complexity Indicator designation indicates the Bonds’ terms and conditions are simple and straightforward with a very low level of complexity on Australia Ratings’ five point Product Complexity Indicator scale.Re

A full rating report is available from www.australiaratings.com.

For more information contact:
Chris Dalton, Managing Director
Email: chris.dalton@australiaratings.com
Tel:  03 8080 6684

SMARTER MONEY FUND 'A' RATING AFFIRMED
Friday, November 04, 2016


Melbourne, 4 November 2016 – Australia Ratings has affirmed its credit rating of ‘A’ to the units issued by the Smarter Money Fund, formerly the Smarter Money Active Cash Fund, (the Fund). The ‘A’ credit rating represents a high degree of creditworthiness on the rating scale used by Australia Ratings to assess the credit profile of a managed fund. The rating primarily reflects the credit quality of the Fund’s investments as well as the experience and skill of the investment manager, Smarter Money Investments.

Australia Ratings analyst Renee Corcoran said “the Smarter Money Fund has continued to pursue its investment objective through actively managing a liquid portfolio of fixed income securities that have a high degree of credit quality.” Ms. Corcoran also noted “investors in the Fund have a low exposure to volatility arising from changes in interest rates and the credit risk of the portfolio is restricted to investment grade securities.”

Smarter Money Fund (formerly the Smarter Money Active Cash Fund) was launched in February 2012 and aims to generate a return of 1.0% to 2.0% above the cash rate by investing in Australian dollar fixed income securities that carry minimal interest rate risk such as cash and floating-rate securities. During the past year to 30 September 2016, the Fund’s return was 3.8% after all fund fees to investors.

While the rating primarily reflects the credit quality of the assets of the Fund, Australia Ratings noted the stability of the investment team and the demonstrated track record of exceeding the investment objective of the Fund.

The units provide investors with a periodic distribution of income and a return of principal via a redemption request. Australia Ratings has also affirmed its Product Complexity Indicator of ‘BLUE” to the Fund’s units to indicate that an investment in the units represents a relatively straightforward type of fixed interest investment.

A full rating report is available from www.australiaratings.com.

For more information contact:
Chris Dalton, Managing Director
chris.dalton@australiaratings.com
03 8080 6684

Renee Corcoran, Director
renee.corcoran@australiaratings.com
03 8080 6684

SMARTER MONEY HIGHER INCOME FUND 'A-' RATING AFFIRMED
Friday, November 04, 2016


Melbourne, 4 November 2016 – Australia Ratings has affirmed its credit rating of ‘A-’ to the units issued by the Smarter Money Higher Income Fund. The ‘A-’ credit rating represents a high degree of creditworthiness on the rating scale used by Australia Ratings to assess a managed fund’s credit profile. The rating primarily reflects the credit quality of the Fund’s investments and the experience and skill of the investment manager, Smarter Money Investments.

Australia Ratings analyst Renee Corcoran said, “Investors in the Fund have low exposure to volatility arising from interest rates changes through a portfolio of fixed income securities with a high degree of credit quality.” Ms. Corcoran added, “The Fund’s credit risk exposure is actively managed with the majority of its assets in investment grade securities such as Australian denominated cash or cash equivalents and Australian denominated floating rate bonds, including RMBS, ABS and hybrid securities.”

The Smarter Money Higher Fund was launched in September 2014 and aims to generate a return of 1.5% to 3.0% p.a. above the RBA official cash rate. The Fund invests in Australian dollar fixed income securities that carry minimal interest rate risk such as cash and floating-rate securities. During the past year to 30 September 2016, the Fund’s return was 4.1% after all fund fees to investors.

While the rating primarily reflects the credit quality of the assets of the Fund, Australia Ratings noted the stability of the investment team and the demonstrated track record of exceeding the investment objective of the Fund.

The units provide investors with a periodic distribution of income and a return of principal via a redemption request. Australia Ratings has also affirmed its Product Complexity Indicator of ‘BLUE” to the Fund’s units to indicate that an investment in the units represents a relatively straightforward type of fixed interest investment.

A full rating report is available from www.australiaratings.com.

For more information contact:
Chris Dalton, Managing Director
chris.dalton@australiaratings.com
03 8080 6684

Renee Corcoran, Director
renee.corcoran@australiaratings.com
03 8080 6684


 

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