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QPCU Heroes Trust Repo Series No.1 Class A Notes Rating Affirmed After Additional Note Issuance

MELBOURNE (S&P Global Ratings) May 15, 2023--S&P Global Ratings today affirmed its 'AAA (sf)' rating on the class A residential mortgage-backed securities (RMBS) issued by Perpetual Corporate Trust Ltd. as trustee for QPCU Heroes Trust Repo Series No.1. QPCU Heroes Trust Repo Series No.1 is a securitization of prime residential mortgages originated by QPCU Ltd. (trading as QBANK).

The rating affirmation follows the issuance of an additional A$32.13 million of class A notes, bringing the aggregate amount of class A and class B notes issued to A$214 million. The proceeds from the note issuance will be used to fund the acquisition of additional loans, as contemplated in the transaction structure.

The rating affirmation reflects our view of the underlying pool as well as the level of credit support provided to the class A notes. Credit support is in the form of class B notes subordination and lenders' mortgage insurance on about 29.6% of the pool of mortgages and exceeds the level of credit support commensurate with a 'AAA (sf)' rating level.

As of April 21, 2023, the pool's weighted-average current loan-to-value ratio is 57.3% and weighted-average loan seasoning is 63 months.

A total of 95.3% of properties in the pool are located in Queensland and 37.3% of properties are in nonmetropolitan locations. We view clustered geographic distributions as being at greater risk of being adversely affected by localized economic downturn and have increased the default frequency of the pool to account for these concentrations.

Arrears have consistently tracked below the Standard & Poor's Performance Index (SPIN) for prime loans.

Our assessment of credit risk also takes into account QBANK's underwriting standards, approval processes, and servicing quality, which are consistent with industry-wide practices.

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Please refer to the initial rating report for any additional regulatory disclosures that may apply to a transaction.


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