The preliminary ratings assigned by S&P Global Ratings to the nonconforming and prime floating-rate residential mortgage-backed securities (RMBS) to be issued by Permanent Custodians Ltd. as trustee for Pepper Residential Securities Trust No.37 reflect the following factors. The credit risk of the underlying collateral portfolio (discussed in more detail under "Credit Assessment") and the credit support provided to each class of notes are commensurate with the ratings assigned. Note subordination and excess spread provide credit support. Our assessment of credit risk takes into account Pepper Homeloans Pty Ltd. (Pepper)'s underwriting standards and approval process as well as Pepper Money Ltd.'s strong servicing quality (discussed in more detail under "Origination And Servicing"). The notes can meet timely payment of interest and