DBRS Confirms Ratings to Classes A1, A2 and A3 Issued by Phoenix Funding 5 Limited

DBRS Ratings Limited (“DBRS”) has reviewed Phoenix Funding 5 Limited (the “Issuer”) and confirms the ratings to the following classes of Notes:

• Class A1 confirmed at ‘A’ (high) (sf)
• Class A2 confirmed at ‘A’ (high) (sf)
• Class A3 confirmed at ‘A’ (high) (sf)

Phoenix 5 Funding Limited is a securitisation of a portfolio of first ranking prime Irish residential mortgages funded by the issuance of three classes of mortgage backed securities. The mortgages were originated and are serviced by KBC Bank Ireland Plc (KBCI), a subsidiary of KBC Bank NV.

The mortgages supporting the transaction are performing within DBRS expectations and the available credit enhancement for each of the Notes is sufficient to cover DBRS expected losses at the current rating levels.

Credit enhancement for the Notes is provided by subordination of Class Z Loan and a non-amortising Reserve Fund equal to €15.6 million (1.75% of the total balance of Notes plus the Class Z Loan amount at issuance). The Reserve Fund would be available to the Issuer to meet any interest shortfalls on the Notes and also for recouping losses debited to the Principal Deficiency Ledgers for the Notes. The Notes are also supported by a Collection Reserve Fund which is available to cover any revenue deficiency to pay interest on the rated Notes after having utilised all funds available in the Reserve Fund and principal receipts. The Collection Reserve Fund is maintained at the greater of 0.75% of the balance of the Notes plus the Class Z Loan amount at issuance, and the aggregate amount of interest payable for 3 months on the Notes assuming the 1-month Euribor rate for the current period.

KBC Bank NV, Dublin branch is the Account Bank for the transaction. The private rating of KBC Bank NV, Dublin branch is above the Minimum Institution Rating given the highest rating assigned to the rated Notes as described in the DBRS Legal Criteria for European Structured Finance Transactions.
Notes:
All figures are in Euros unless otherwise noted.

The principal methodologies applicable are:
• Master European Residential Mortgage-Backed Securities Rating Methodology
• Legal Criteria for European Structured Finance Transactions
• Derivative Criteria For European Structured Finance Transactions
• Operational Risk Assessment for European Structured Finance Servicers
• Unified Interest Rate Model Methodology for European Securitisations
• Master European Structured Finance Surveillance Methodology

These can be found on dbrs.com under Methodologies. For a more detailed discussion of sovereign risk impact on Structured Finance ratings, please refer to DBRS commentary “The Effect of Sovereign Risk on Securitisations in the Euro Area”.

The sources of information used for this rating include Monthly Investor Report provided by KBC Bank Ireland and data from the European DataWarehouse. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance. The extent of any factual investigation or independent verification depends on facts and circumstances.

The most recent rating action on this transaction took place on 31 August 2012, when DBRS removed the Class A1, Class A2 and Class A3 from Under Review with Negative implications following the confirmation of the Republic of Ireland.

The individual linking document for this transaction is located at http://www.dbrs.com/research/250531/linking-document-phoenix-funding-5-limited.pdf

For further information on DBRS’s historic default rates published by the European Securities and Markets Administration (“ESMA”) in a central repository see http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Initial Lead Analyst: Alastair Bigley
Initial Rating Date: 6 June 2012
Rating Committee Chair: Erin Stafford

Lead Surveillance Analyst: Elisa Scalco
Rating Committee Chair: Erin Stafford

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