S&P Rates RAMS Series-5E Eurobonds AAA/AA-.

MELBOURNE--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/2/98--Standard & Poor's today assigned its triple-'A' rating to RAMS Mortgage Corp. Ltd.'s (RMC) Series-5E US$100 million of class A1 senior bonds and US$284 million of class A2 senior bonds, and its double-'A'-minus rating to RMC's US$16 million of class B subordinated bonds. RMC has previously issued Australian dollar residential mortgage-backed bonds into the Australian domestic market, but this is the entity's first issue of residential mortgage-backed bonds into the Euro-market. The ratings reflect: -- The credit quality of the mortgage assets and other authorized investments of the company; -- Primary mortgage insurance on all mortgages from insurers rated double-'A'-minus or higher; -- The subordination of the class B bonds, which is equal to 4% of all bonds issued; -- The terms of the originator's fees, which are payable only to the extent that there is excess income available after paying both senior and subordinated classes' coupon obligations and other fees and expenses of the series; and -- Cross-currency swaps with Morgan Guaranty Trust Co. of New York, London Branch and UBS AG, London Branch, that transform the Australian dollar cash flows from the Australian assets into U.S. dollar cash flows to facilitate the payment of principal and interest on the U.S. dollar bonds.

The double-'A'-minus rating of the class B bonds reflects all of the above factors except subordination. The ratings on the U.S. dollar bonds would ordinarily be constrained by the double-'A' foreign currency rating on the Commonwealth of Australia. However, the risks of currency convertibility and transferability are being assumed under the cross-currency swap by the swap providers. This allows a rating of triple-'A' to be assigned to the U.S. dollar class A1 and class A2 bonds. The Series-5E bonds are U.S. dollar pass-through securities after an initial substitution period, which may end early under certain circumstances.

The issuer may call the bonds at its option after certain dates, but may elect not to call the bonds, and instead pay an increased margin on those bonds from that date until maturity. The bonds are backed by fixed and floating-rate, amortizing loans secured by first-registered mortgages over property located throughout Australia. The loans have all been originated by RAMS Home Loans Pty. Ltd., Standard & Poor's said. -- CreditWire