ARMS II Fund VI A$289.5M Expected ``AAA'' Rtg By Fitch IBCA.

Business Editors

SYDNEY, Australia/NEW YORK--(BUSINESS WIRE)--Feb. 1, 2000

ARMS II Fund VI's A$289.5 million amortising, pass-through, floating-rate tranche 1 and tranche 2 bonds are expected to be rated 'AAA' by Fitch IBCA.

In addition, the $10.5 million tranche 3 bonds are expected to be rated 'AA-'. This is the seventh securitised issue of notes backed by a residential mortgage pool from the Australian Mortgage Securities Ltd. (AMS) ARMS II program and the sixth Australian issuance. The notes will be issued by Permanent Custodians Ltd. (the trustee and issuer) in its capacity as trustee of ARMS II Fund VI. The fund is an individual trust fund created under the master trust deed for ARMS II funds.

The ratings expected to be assigned to the tranche 1 and tranche 2 bonds are based on: the subordination (3.5%) of the tranche 3 bonds; the quality of the collateral; the 100% primary mortgage insurance policies, including 24 months' timely payment cover provided by 'AA' rated GE Capital Mortgage Insurance (Australia) Pty Ltd, 'AA' rated CGU Lenders Mortgage Insurance Ltd, PMI Mortgage Insurance Ltd, and Royal &Sun Alliance Lenders Mortgage Insurance Ltd; the cash reserve of 0.25% of the total principal balance; and a sound legal structure.

The rating expected to be assigned to the $10.5 million amortising, pass-through, floating-rate tranche 3 bonds is based on all the strengths supporting the tranche 1 and tranche 2 bonds, except the credit enhancement provided by the subordinate tranche 3 bonds.

To assess the credit risk of the portfolio of mortgage loans, Fitch IBCA analysed the collateral under various stress scenarios using its default model geared specifically for the Australian mortgage market (for additional information see Fitch IBCA research titled 'Australian Residential Mortgage Default Model 1999,' dated Feb. 17, 1999, available on Fitch IBCA's web site at www.fitchibca.com). In addition, the presale report for ARMS II Fund VI is now available on Fitch IBCA's web site.

As of the cut-off date, the pool serving as collateral for the bonds consists of 1,506 mortgage loans, with a total outstanding balance of approximately $298.9 million. All the mortgages are first-ranking mortgages over residential property originated by mortgage brokers for the benefit of AMS in the ordinary course of AMS's business. All loans have the benefit of primary mortgage insurance.

The mortgage loans are amortising principal and interest loans having a maximum term of 25 years. However, 36.3% of the mortgages have an interest-only term of up to five years before converting to full amortisation. Currently, 1.2% of the loans pay at least a portion of the balance based on a fixed interest rate. However, the terms of most of the loans allow the borrower to convert to a fixed-rate term of up to five years.

As of the cut-off date, the average principal loan balance was 198,505, with a weighted average original loan-to-value ratio of 74.9%. Almost all of the loans were originated in the past six months. Approximately 53.6% of the properties are owner occupied.