-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TP0wt4j3TfsEi6KxLlpWw+c8dIQQ4bKtF2YGpMEBDhtyzC84Y0wJrY51R+KWVav0 JHg1+lWiVrHmLr7bGF0Tzg== 0000902561-04-000438.txt : 20040928 0000902561-04-000438.hdr.sgml : 20040928 20040928141907 ACCESSION NUMBER: 0000902561-04-000438 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040928 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUSTRALIAN SECURIT MANAGEMENT PTY ARMS II GLOBAL FUND 2 CENTRAL INDEX KEY: 0001286245 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-108887-01 FILM NUMBER: 041049423 BUSINESS ADDRESS: STREET 1: LEVEL 6 12 CASTLEREAGH STREET STREET 2: SYDNEY NEW SOUTH WALES CITY: AUSTRALIA STATE: C3 ZIP: 00000 10-K 1 form10k_2sf092804.txt FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (MARK ONE) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES (X) EXCHANGE ACT OF 1934 For the fiscal period ended JUNE 30, 2004 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission file number: 333-108887 AUSTRALIAN SECURITISATION MANAGEMENT PTY LIMITED (ACN 103 852 428) (in its capacity as Trust Manager of the ARMS II Global Fund 2) (Exact name of Registrant as specified in its charter) NEW SOUTH WALES, AUSTRALIA (State or Other Jurisdiction of Incorporation) LEVEL 6, 12 CASTLEREAGH STREET, SYDNEY, NSW, 2000, AUSTRALIA Telephone: +61-2-8236-8000 (Address of principal executive offices) Securities registered or to be registered pursuant to Section 12(b) of the Act: NONE Securities required to be registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes (X) No ( ) i Indicated by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this 10-K or any amendment to this Form 10-K. (X) Indicated by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes____ No__(X)__ State the aggregate market value of the voting and non-voting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. NOT APPLICABLE ii TABLE OF CONTENTS Part I Page Item 1. Business........................................................... 2 Item 2. Properties......................................................... 2 Item 3. Legal Proceedings.................................................. 2 Item 4. Submission of Matters to a Vote of Security Holders................ 2 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.................. 3 Item 6. Selected Financial Data............................................ 3 Item 7. Management's Discussion and Analysis of Financial Conditions and Results of Operation............................................... 3 Item 7A. Quantitative and Qualitative Disclosures About Market Risk......... 3 Item 8. Financial Statements and Supplementary Data........................ 5 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure............................................... 5 Part III Item 10. Directors and Executive Officers of the Registrant................. 6 Item 11. Executive Compensation............................................. 6 Item 12. Security Ownership of Certain Beneficial Owners and Management..... 6 Item 13. Certain Relationships and Related Transactions .................... 6 Item 14. Principal Accounting Fees and Services............................. 6 Part IV Item 15. Exhibits and Financial Statement Schedules......................... 7 iii INTRODUCTORY NOTE The information required for some items in Form 10-K is "not applicable" to ARMS II Global Fund 2 (the "Fund") or to Australian Securitisation Management Pty Limited (the "Trust Manager"). As used in this Annual Report files on Form 10-K, "not applicable" or "Not Applicable" means that the response to the referenced item is omitted in reliance on the procedures outlined in the numerous no-action letters issued by the Commission's Staff with respect to substantially similar certificates and trusts that file annual reports on Form 10-K. 1 PART I Item 1. BUSINESS This Annual Report on Form 10-K relates to the Fund, and the Class A Bonds due October 2034 (the "Class A Bonds") issued pursuant to the Bond Trust Deed dated as of October 27, 2003 (the "Bond Trust Deed"), between Permanent Custodians Limited as Issuer (the "Issuer"), the Trust Manager, The Bank of New York as the Bond Trustee, the Calculation Agent, the US$ Registrar and the Principal Paying Agent, and Permanent Registry Limited (the "Security Trustee"). Capitalized terms used in this Form 10-K and not defined have the same meanings given to them in the Prospectus related to the Class A Bonds. The only business of the Fund is the collection and distribution of payments on the residential housing loans in the manner described in the Registration Statement on Form S-11 (File No. 333-108887) (the "Registration Statement"). Accordingly, there is no relevant information to report in response to Item 101 of Regulation S-K. Item 2. PROPERTY The Fund does not own any physical property. Information regarding the mortgage loans is furnished under Item 15 - Exhibit 99.1. Item 3. LEGAL PROCEEDINGS As at the date of this report, the Trust Manager is not aware of any material pending legal proceedings in relation to the Fund, itself or the Trustee. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted during the fiscal year covered by this report to a vote of Secured Creditors in relation to the Fund. 2 PART II Item 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Class A Bonds are not traded on any nationally recognized exchange in the United States. The Class A Bonds are listed and exchanged on the Irish Stock Exchange. The Class A Bonds are currently represented by certificates registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). Accordingly, Cede & Co. is the sole holder of record of the Class A Bonds, which it held on behalf of a number of brokers, dealers, banks and other direct participants in DTC. Since the Fund pays no dividends with respect to the Class A Bonds, the information required by Item 201(c) of Regulation S-K regarding dividends is inapplicable to the Fund. See Exhibit 99.1 for information with respect to distributions to Bondholders. Item 6. SELECTED FINANCIAL DATA The regular quarterly servicing report, which is required to be included with each quarterly distribution of the Fund's assets to Bondholders, sets forth for the prior quarter, as well as cumulatively, all of the relevant financial information required by the Bond Trustee to be reported to Bondholders. The quarterly servicing reports for the Payment Dates on January 12, 2004; April 13, 2004; and July 12, 2004 for the fiscal year ended June 30, 2004 are incorporated herein as Exhibit 99.1. The foregoing presents all relevant financial information relating to the Fund. Because of the limited business activity of the Fund, the Selected Financial Data in Item 301 of Regulation S-K would not provide any meaningful additional information. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Because of the limited business activity of the Fund, the presentation of Management's Discussion and Analysis of Financial Condition and Results of Operations, as otherwise would be required by Item 303 of Regulation S-K, would not be meaningful. All relevant information is contained in the quarterly servicing reports (filed on Form 6-K and on Form 8-K) as described above. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Currency Exchange Control Risk: Interest and principal payments to holders of the Class A Bonds are paid in United States dollars ("U.S. dollars"). However, payments on 3 the housing loans are received by the Issuer in Australian dollars, in Australia (the "Collections"). Pursuant to certain swap agreements (the "Swap Agreements"), the Issuer is required to pay a portion of the collections to a certain swap counterparty (the "Currency Swap Provider"), who in turn pays ("Swap Currency Exchange"), at the direction of the Issuer, U.S. dollars (as applicable) to the Bondholders, (the "Currency Swap"). It is possible that in the future Australia may impose exchange controls that affect the availability of Australian dollar payments for making payments under the Currency Swap. The holders of the Class A Bonds will bear the risk of the imposition of foreign exchange controls by the Australian government that impact upon the Issuer's ability to exchange the collections for U.S. dollars. The Issuer has no control over such risk, which will generally be affected by economic and political events in Australia. If the Issuer does not have sufficient funds to pay the Currency Swap Provider the Class A Currency Swap Payment Amount on a Payment Date, the Currency Swap Provider will not be required to make the corresponding US$ payment to the Principal Paying Agent and, after the applicable grace period, the Currency Swap Provider may terminate the Currency Swaps. In such event, it is unlikely that the Fund would have sufficient U.S. dollars to make the payments due on the Class A Bonds. The specific prior approval of the Reserve Bank of Australia or the Minister for Foreign Affairs of the Commonwealth of Australia must be obtained for certain transactions involving or connected with individuals or entities listed in the relevant Commonwealth Government Gazette as persons or entities identified with terrorism or to which financial sanctions apply, including: o certain Yugoslav entities or individuals; o Jemaah Islamiah; o the Government of Zimbabwe, any public authority or controlled entity of the Government of Zimbabwe and certain other individuals identified by the Reserve Bank of Australia; o the Taliban (also known as the Islamic Emirate of Afghanistan) or any undertaking owned or controlled, directly or indirectly, by the Taliban; o Osama bin Laden, the Al-Qaeda organization and certain other individuals identified by the Reserve Bank of Australia as being linked to terrorism; and o the persons whose names are published in the Commonwealth Government Gazette Gn42 as amended by Commonwealth Government Gazette Gn37 and Commonwealth Government Gazette Gn49, and the persons whose names are listed under the Suppression of the Financing of Terrorism Act 2002 (Commonwealth). Currency Exchange Risk: Interest and principal on the Class A Bonds is payable in U.S. dollars and the Fund's primary source for funding its payments on the Class A Bonds is its Collections on the Housing Loans, which will be sourced in Australian 4 dollars. If the Currency Swap Provider were to fail to perform under the Currency Swap or were to be discharged from such performance because of a default thereunder by the Fund, the Fund might have to exchange its Australian dollars for U.S. dollars at an exchange rate that is less favorable to the Fund than when the currency swap was entered into and might therefore not have sufficient U.S. dollars to make timely payments on the Class A Bonds, even though the delinquency and loss experience on the Housing Loans may be acceptable. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA As discussed above, furnishing the financial information required by Item 8 of Form 10-K would not add any relevant information to that provided by the foregoing statements. Because the Class A Bonds are essentially "pass-through" securities, the Fund will have "income" only in the limited sense of collecting payments on the residential mortgage loans. The only material items of "expense" for the Fund will be the amounts paid as servicing compensation, other amounts due on the redraw bonds, if any, the amounts due to the redraw facility provider, and potentially certain payments relating to any other credit enhancement facilities. The quarterly servicing reports (filed on Form 6-K and on Form 8-K) provide all material information regarding the amounts of the "income" and "expenses" of the Fund. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There has been no resignation or dismissal of an independent accountant in relation to the Fund since it was created. 5 PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Since the Fund does not have directors or executive officers, this item is not applicable. Item 11. EXECUTIVE COMPENSATION Since the Fund does not have directors or executive officers, this item is not applicable. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT All of the Bondholders maintained their security positions with the Depository Trust Company. While some of the Bondholders' security positions in the Fund may exceed 5% of the outstanding amount of the Class A Bonds, such Class A Bonds do not constitute voting securities within the meaning of Item 403 of Regulation S-K. None of the officers or directors of the Registrant owns a beneficial interest in the Fund, nor in the Registrant. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Registrant received Manager's Fee payments from the Fund in accordance with the terms of the Bond Trust Deed. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Asset-Backed Issuers are not required to respond to this item. Thus there is no information to disclose under item 406 of Regulation S-K. 6 PART IV Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (1) and (2): Incorporated herein as Exhibit 99.1 are the aggregate totals of the quarterly servicing reports to the Fund for the fiscal year ended June 30, 2004. A copy of the Officer's Certificate of Compliance is attached hereto as Exhibit No. 99.3. (3) (a) EXHIBITS: Designation Description Method of Filing ----------- ----------- ---------------- Exhibit 31 302 Certification 31 Exhibit 99.1 Aggregate Totals for the Fiscal Year 99.1 Exhibit 99.2 Independent Auditor's Annual Servicer 99.2 Compliance Certificate Exhibit 99.3 Officer's Certificate of Compliance 99.3 (b) On Janaury 26,2004 (as amended by Form 6-K/A filed on August 17, 2004); April 23, 2004 (as amended by Form 8-K/A filed on August 17, 2004); and July 16, 2004 (as amended by Form 8-K/A filed on August 17, 2004), reports on Form 6-K and on Form 8-K were filed by the Registrant during the preceding fiscal year in order to provide the statements for quarterly distributions to the Bondholders. No other reports on form 8-K have been filed during the last fiscal year covered by this report. 7 SIGNATURES Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. By /s/ Gavin Buchanan ------------------------- GAVIN BUCHANAN PRINCIPAL EXECUTIVE OFFICER 27 SEPTEMBER 2004 8 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Paul McMahon By /s/ Mark Burge ------------------------ ------------------------ PAUL MCMAHON MARK BURGE PRINCIPAL FINANCIAL OFFICER PRINCIPAL ACCOUNTING OFFICER 27 SEPTEMBER 2004 27 SEPTEMBER 2004 By /s/ Mark Bouris By /s/ Colin McKeith ------------------------ ------------------------ MARK BOURIS COLIN McKEITH DIRECTOR DIRECTOR 27 SEPTEMBER 2004 27 SEPTEMBER 2004 By /s/ Geoff Kleeman By /s/ Anthony Klok ------------------------ ------------------------ GEOFF KLEEMAN ANTHONY KLOK DIRECTOR DIRECTOR 27 SEPTEMBER 2004 27 SEPTEMBER 2004 By /s/ Adrian Bouris ------------------------ ADRIAN BOURIS DIRECTOR 27 SEPTEMBER 2004 9 EX-31 2 form10k_2ex31sf092804.txt EXHIBIT 31 - 302 CERTIFICATION EXHIBIT 31 AUSTRALIAN SECURITISATION MANAGEMENT PTY LIMITED (ACN 103 852 428) LEVEL 6 12 CASTLEREAGH STREET SYDNEY NSW 2000 Phone +61-2-8236-8000 Fax +61-2-9216-3815 27 September 2004 302 Certification in relation to ARMS II Global Fund 2 I, Gavin Buchanan, certify that: 1. I have reviewed this annual report on Form 10-K, and all reports on Form 6-K and Form 8-K, as amended, containing distribution or servicing reports filed in respect of periods included in the year covered by this annual report, of the ARMS II Global Fund 2; 2. Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report; 3. Based on my knowledge, the distribution or servicing information required to be provided to the trustee by the servicer under the pooling and servicing, or similar, agreement, for inclusion in these reports is included in these reports; 4. I am responsible for reviewing the activities performed by the servicer under the pooling and servicing, or similar, agreement and based upon my knowledge and the annual compliance review required under that agreement, and except as disclosed in the reports, the servicer has fulfilled its obligations under that agreement; and 5. The reports disclose all significant deficiencies relating to the servicer's compliance with the minimum servicing standards based upon the report provided by an independent public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar procedure, as set forth in the pooling and servicing, or similar, agreement, that is included in these reports. Date: 27 September 2004 /s/ Gavin Buchanan - ------------------------ GAVIN BUCHANAN Principal Executive Officer of Australian Securitisation Management Pty Limited EX-99 3 form10k_2ex99-1sf092804.txt EXHIBIT 99.1 - BONDHOLDERS REPORT SUMMARY Exhibit 99.1
---------------------------------------------------------------------------------------------------------------- Bond Trust Deed ARMS II GLOBAL FUND 2 Schedule 8 BONDHOLDERS REPORT SUMMARY 2003-2004 Reference ---------------------------------------------------------------------------------------------------------------- REPORTING DATES Cut-Off Date March 31, 2004 Determination Date April 7, 2004 Payment Date April 13, 2004 Start Interest Period October 30, 2003 End Interest Period April 12, 2004 No of Days in Interest Period 166 Start Calculation Period October 30, 2003 End Calculation Period March 31, 2004 No of Days in Calculation Period 154 ---------------------------------------------------------------------------------------------------------------- SECURITIES ON ISSUE Amount Amount (US$) (A$) Class A Bonds Initial Face Value 1,000,000,000 1,428,571,429 Previous Principal Distribution - - Principal Distribution for current calculation period 79,200,000 113,142,857 Total Principal Distribution to date 79,200,000 113,142,857 - Beginning Principal Amount 1,000,000,000 1,428,571,429 (a) Ending Principal Amount 920,800,000 1,315,428,571 less Unreimbursed Charge-offs - - Beginning Stated Amount 1,000,000,000 1,428,571,429 (a) Ending Stated Amount 920,800,000 1,315,428,571 Class B Bonds Initial Face Value 33,500,000 47,857,143 Previous Principal Distribution - - Principal Distribution for current calculation period - - Total Principal Distribution to date - - - Beginning Principal Amount 33,500,000 47,857,143 (a) Ending Principal Amount 33,500,000 47,857,143 less Unreimbursed Charge-offs - - Beginning Stated Amount 33,500,000 47,857,143 (a) Ending Stated Amount 33,500,000 47,857,143 ----------------------------------------------------------------------------------------------------------------
INTEREST RATE FOR ACCRUAL PERIOD Libor / Interest Interest Bank Bill Rate Margin Rate USD Class A Bonds na 0.25000 na Class B Bonds na 0.75000 na AUD Class A Bonds (payable to Currency Swap Provider) na 0.4229 na Class B Bonds na 0.9731 na ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAYABLE ON PAYMENT DATE $US $A Interest Entitlement: (b) Class A Bonds 6,320,500 36,351,438 (b) Class B Bonds 292,401 1,358,119 Principal Repayment: (c) Class A Bonds 79,200,000 113,142,857 (c) Class B Bonds - - Total: Class A Bonds 85,520,500 149,494,295 Class B Bonds 292,401 1,358,119 Total 85,812,901 150,852,414 ---------------------------------------------------------------------------------------------------------------- POOL FACTORS Last Current Distribution Distribution Date Date (h) Class A Bonds 1.0000 0.9208 Class B Bonds 1.0000 1.0000 ---------------------------------------------------------------------------------------------------------------- (d) INCOME COLLECTIONS FOR CALCULATION PERIOD 42,430,786 ---------------------------------------------------------------------------------------------------------------- AVAILABLE AMORTISATION AMOUNT $AUD (i) Scheduled Principal Collections 3,946,558 (i) Unscheduled Principal Collections 176,621,321 Gross Principal Collections 180,567,878 less (g) Redraw Advances, Line of Credit Advances and Permitted Further Advances 66,551,928 (e) Net Principal Collections 114,015,950 Application of Cash Reserve and Advances Reserve as Available Amortisation Amount (873,093) (l) Charge-offs and Unreimbursed Charge-offs 0 (f) Available Amortisation Amount 113,142,857 ---------------------------------------------------------------------------------------------------------------- PORTFOLIO INFORMATION (based on Loans forming part of the Assets of the Fund as at the last day of the Calculation Period) (j) Aggregate Face Value of Loans 1,359,063,833 Total number of Loans 5,345 Average Loan Balance 254,268.26 Weighted Average LVR 72.34
Seasoning No of Loans % by number Balance % by balance 0 to 6 months - 0.00% - 0.00% 6 to 12 months 4,713 88.18% 1,197,470,979 88.11% 12 to 18 months 396 7.41% 105,000,915 7.73% 18 to 24 months 112 2.10% 28,270,392 2.08% 24 to 36 months 92 1.72% 23,602,759 1.74% 36 to 48 months 6 0.11% 1,494,304 0.11% 48 to 60 months 2 0.04% 482,437 0.04% >60 months 24 0.45% 2,742,047 0.20% 5,345 100.0% 1,359,063,833 100.00% ----------------------------------------------------------------------------------------------------------------
(k) AGGREGATE LOSS AMOUNT NIL ---------------------------------------------------------------------------------------------------------------- (m) DELINQUENCY AND LOSSES Delinquency AUD Amount % of of Loans Pool 31 - 60 days 13,726,545 1.01% 61 - 90 days 3,700,890 0.27% 90+ days 3,667,537 0.27% Losses AUD Mortgage Insurance claims made Nil Mortgage Insurance claims paid Nil Mortgage Insurance claims pending Nil Mortgage Insurance claims denied Nil ----------------------------------------------------------------------------------------------------------------
EX-99 4 form10k_2ex99-2sf092804.txt EXHIBIT 99.2 - COMPLIANCE CERTIFICATE EXHIBIT 99.2 Independent Auditor's Annual Servicer Compliance Certificate - ARMS II Global Fund 1 - ARMS II Global Fund 2 - ARMS II Global Fund 3 To: Directors of Australian Securitisation Management Pty Limited Scope We have reviewed Australian Mortgage Securities Limited's ("the Servicer") activities for the purpose of determining its compliance with the servicing standards contained in the Master Trust Deed dated 7 March 1995, the Deed of Variation of Master Trust Deed dated 23 April 2003, the Bond Trust Deeds dated 2 June 2003, 27 October 2003 and 23 January 2004 respectively, the Master Origination and Servicing Agreement dated 7 March 1995, and the AMS ARMS II Programme - Agreed Procedures document, as amended, (collectively, "the Service Documents"), in relation to ARMS II Global Fund 1, ARMS II Global Fund 2 and ARMS II Global Fund 3 (collectively, the "Trusts") for the year ended 30 June 2004, in accordance with the statement by the Division of Corporation Finance of the Securities and Exchange Commission dated 21 February 2003, and our engagement letter dated 14 September 2004. We have reviewed the servicing standards contained in the Service Documents as summarised in Appendix 1, to enable us to report on whether those servicing standards are similar to those contained in the Uniform Single Attestation Program for Mortgage Bankers ("USAP"), attached hereto as Appendix 2, which establishes a minimum servicing standard for the asset backed securities market in the United States of America. No equivalent of the USAP exists in Australia. The management of the Servicer is responsible for maintaining an effective internal control structure including internal control policies and procedures relating to the servicing of mortgage loans. We have conducted an independent review of the servicing standards included in Appendix 1, in order to express a statement on the Servicer's compliance with them to Australian Securitisation Management Pty Limited. Our review of the servicing standards has been conducted in accordance with Assurance Engagements Standard AUS 108 "Assurance Engagements" and accordingly included such tests and procedures as we considered necessary in the circumstances. In conducting our review we have also had regard to the guidance contained in the USAP. These procedures have been undertaken to enable us to report on whether anything has come to our attention to indicate that there has not been compliance in all material respects by the Servicer with the servicing standards contained in the Service Documents for the year ended 30 June 2004. EXHIBIT 99.2 2 Our review did not include an assessment of the adequacy of the servicing standards themselves. This statement has been prepared for the use of Australian Securitisation Management Pty Limited as at 30 June 2004 in accordance with the requirements of the statement by the Division of Corporation Finance of the Securities and Exchange Commission dated 21 February 2003, and the engagement letter dated 13 September 2004. We disclaim any assumption of responsibility for any reliance on this review statement, to any person other than Australian Securitisation Management Pty Limited. Statement Based on our review, nothing has come to our attention to indicate that; o there has been significant deficiencies in the Servicer's ompliance with the servicing standards contained in the Service Documents attached hereto as Appendix 1, in respect of the Trusts , for the year ended 30 June 2004; o the servicing standards contained in the Service Documents are not similar to the minimum servicing standards contained in the USAP, except for the following: o Funds of the servicing entity shall be advanced in cases where there is an overdraft in an investor's or a mortgagor's account; o Escrow funds held in trust for a mortgagor shall be returned to the mortgagor within thirty (30) calendar days of payoff of the mortgage loan; o Tax and insurance payments shall be made on or before the penalty or insurance policy expiration dates, as indicated on tax bills and insurance premium notices, respectively, provided that such support has been received by the servicing entity at least thirty (30) calendar days prior to these dates; o Any late payment penalties paid in conjunction with the payment of any tax bill or insurance premium notice shall be paid from the servicing entity's funds and not charged to the mortgagor, unless the late payment was due to the mortgagor's error or omission; o Escrow accounts shall be analyzed, in accordance with the mortgagor's loan documents, on at least an annual basis; o Interest on escrow accounts shall be paid, or credited, to mortgagors in accordance with the applicable state laws; o A fidelity bond and errors and omissions policy shall be in effect on the servicing entity throughout the reporting period in the amount of coverage represented to investors in management's assertion. EXHIBIT 99.2 3 /s/ Ernst & Young Ernst & Young September 2004 Appendix 1: Summary of Service Documents Appendix 2: Uniform Single Attestation Program for Mortgage Bankers EXHIBIT 99.2 4 Appendix 1: Summary of Service Documents Authorities: A: Master Trust Deed dated 7 March 1995 Clause 11.15 "All mortgages must be originated, managed and serviced in accordance with: a) the Master Origination and Servicing Agreement;" B: Master Origination and Servicing Agreement dated 7 March 1995 Clause 2.2 "In exercising its powers and performing its obligations under this Agreement, the Master Servicer must comply and act in accordance with the Agreed Procedures in all respects." "Agreed Procedures" means all procedures, policies, criteria and guidelines relating to the acquisition, origination, management and servicing of Mortgages agreed between the Trustee and Master Servicer from time to time. The initial Agreed Procedures are set out in the document entitled "ARMS II Programme - Agreed Procedures" dated on or about the date of this Agreement, and initialed by the parties for identification purposes." C: Deed of Variation of Master Trust Deed dated 23 April 2003 - Recital C "The parties are entering into this Deed to: a) amend the Master Trust Deed in respect of each fund to be constituted on or after the date of this Deed which is designated a Global Fund in the Fund Creation Notice relating to that fund (a Global Fund); and b) appoint ASM as Trust Manager of each Global Fund. D: Copy of Agreement between ASM Limited and AMS Limited, delegating servicing powers in respect of the Global Fund No 1 (attached) E: Copy of Agreement between ASM Limited and AMS Limited, delegating servicing powers in respect of the Global Fund Nos 2 and 3 (attached) EXHIBIT 99.2 5 Servicing Standards: Master Trust Deed dated 7 March 1995 18. Opening of Trust Accounts "The Trustee: a) must, as directed by the Trust Manager, open a separate account with a Bank in respect of each Fund. Each such account must: i) be opened in the name of the Trustee; ii) bear a designation indicating the Fund to which it relates; and iii) in the case of a Rated Fund, be maintained with a Bank whose debt obligations are rated at all relevant times by the Designated Rating Agency, not lower than the Designated Rating; and b) may open such additional accounts with a Bank in respect of a Fund as the Trust maanger may direct." The following definitions are taken from the Master Trust Deed: "Bank means a corporation authorised under Part 2 of the Banking Act, 1959 to carry on banking business, including the general business of banking, in Australia, or a corporation formed of incorporated under an Act of the Parliament of an Australian Jurisdiction to carry on the general business of banking." "Designated Rating means, in relation to a person or an obligation, and a Rated Fund, each credit rating as specified or approved by each Designated Rating Agency for that Fund or for the obligations of the Trustee as trustee of that Fund." 18.3 Authorised Signatories "The Trustee must ensure that the only authorised signatories for any Trust Account are officers or employees of the Trustee." 20. Records and Financial Statements "a) The Trust Manager must keep accounting and other records which correctly record and explain the Assets and financial position of each Fund, and all transactions entered into by the Trustee as trustee of each Fund, in a manner which will enable the preparation from time to time of true and fair Financial Statements of each Fund and the auditing of those Financial Statements." Master Origination and Servicing Agreements dated 7 March 1995 5.1 Required Degree of Skill and Care "The Master Servicer must manage each Mortgage using the same degree of skill and care as would be used by a responsbile and prudent mortgagee and in accordance with: a) This Agreement; b) The requirements of any Enhancement relating to or covering that Mortgage; and c) The Agreed Procedures." 7.1 Master Servicer will Account to the Trustee for all Monies Received "The Master Servicer must immediately (and in any event within one Business Day of receipt) pay to the Trustee all money which it receives under or in connection with any Mortgage Document or as a result of or in connection with the exercise of any Power under any Mortgage Document." 7.4 Maintenance of Records "The Master Servicer must keep accounting and other records which correctly record and explain: a) the origination and settlement of each Mortgage; b) the entering into of all Mortgage Documents entered into in connection with each Mortgage; c) all payments made and received by or on behalf of the Trustee under each Mortgage Document; d) all action taken in the exercise of any Power; and e) the financial position at any time in relation to each Mortgage in a manner which will enable the preparation from time to time of accounts and other financial statements in accordance with the requirements of all applicable Laws and otherwise in such form as the Trustee from time to time requires. These accounting and other records must be kept in such form and using such data storage, access and retrieval methods as are set out in the Agreed Procedures." EXHIBIT 99.2 6 9.1 Procedures on Default The Master Servicer must, subject to clause 9.5, take such action following the occurrence of an Event of Default, and enforce the Powers (including by taking legal procedings) in respect of any Defaulting Mortgage in such manner as: a) the Master Servicer reasonable considers necessary to: i) remedy that Event of Default; ii) recover the money secured by that Defaulting Mortgage; and iii) protect and preserve the rights of the Trustee as mortgagee and the interest of Bondholders under the Master Trust Deed and Security Trust Deed; and b) is required to ensure that any losses suffered in relation to that Mortgage which are, or are required to be insured under a Mortgage Insurance Policy are able to be claimed under that Mortgage Insurance Policy." 11.1 Master Servicer to Bear Own Costs "The Master Servicer must pay all costs and expenses of performing its obligations under this Agreement, and is not entitled to reimbursement or compensation from the Trustee except to the extent expressly stated in this Agreement." Bond Trust Deeds dated 2 June 2003, 27 October 2003 and 23 January 2004 respectively Schedule 3, Terms and Conditions of the Bonds, Condition 4.4 Application of Interest Collections "Subject to these Conditions, on each Payment Date, the Trust Manager must direct the Issuer to, and the Issuer must, apply or cause to be applied, the Interest Collections for the relevant Calculation Period as follows: a) (Taxes) First, in or towards payment or reimbursement of all taxes in respect of the Fund payable or paid during that Calculation Period or which the Issuer on the advice of the Trust Manager considers it necessary, on or before the date which is three Business Days before the Payment Date relating to that Calculation Period, to make provision for; b) (Expenses) second, in or towards......." Schedule 3, Terms and Conditions of the Bonds, Condition 6.3 "Amounts credited to the Cash Reserve Account must beinvested in Authorised Investments: (a) which are rated "AAA" or "A-1+" by S&P, "Aaa" or "P1" by Moody's and "AAA" or "F1+" by Fitch Ratings or such other rating determined from time to time by the Trust Manager (subject to each Designated Rating Agency confirming that such other rating will not cause the rating assigned by it to Bonds to be downgraded below the Designated Rating, qualified or withdrawn); (b) will mature not later than the Payment Date immediately after the date on which they are made; and (c) which are otherwise made in accordance with the Master Trust Deed." Schedule 3, Terms and Conditions of the Bonds, Condition 14.3 Minimum Rating Requirements "Subject to Condition 6.3, all Authorised Investments of the Fund other than cash and Mortgages must be rated "AAA" or "A-1+" by S&P, "Aaa" or "P1" by Moody's and "AAA" or "F1+" by Fitch Ratings (or in any such case, such other credit rating as the relevant Designated Rating Agency may from time to time agree) and must mature such that the Issuer is able to meet its obligations under the Transaction Documents as they fall due." Clause 11.1 Details to be kept on the Register "The Issuer must, subject to clause 11.8, keep a register in relation to the A$ Bonds (the A$ Register) and a register in relation to the Class A Bonds (the US$ Register) in which shall be inscribed the following information in respect of the A$ Bonds or Class A Bonds (as the case may be): a) the Issue Date for such Bonds; b) the number and Face Value of such Bonds issued on each Issue Date; c) the Conditions (and any amendments or variations thereto made pursuant to caluse 16) for all such Bonds; d) the name, address and tax file or tax identification number of each holder of such Bonds; e) the number of such Bonds held by each Bondholder; f) in the case of A$ Bonds, details of any Registration Confirmation issued to a Bondholder; g) the date on which a person was entered as the holder of such Bonds; h) the date on which a person ceased to be a Bondholder of such Bonds; EXHIBIT 99.2 7 i) the account to which any payments due to a Bondholder or such Bonds are to be made (if applicable); j) a record of each payment in respect of such Bonds (including the then Face Value of such Bonds); and k) such other information as the Issuer or the Trust Manager considers necessary or desirable." Bond Trust Deed, Clause 12.1(f) Bondholders Report "In the case of the Trust Manager only, deliver to the Principal Paying Agent, the Issuer and the Class A Bond Trustee within 5 Business Days of each Payment Date, the Bondholders Report for the related Calculation Period, with written instructions for the Class A Bond Trustee to forward the Bondholders Report to each Class A Bondholder. Each Bondholders Report shall contain the information set out in Schedule 8; ..." ARMS II Programme - Agreed Procedures dated 9 March 2004 8. MORTGAGE MANAGEMENT 8.1 Mortgage Collections AMS will manage the cash receipting process via the direct debit system. Any mortgage proceeds received directly from the Borrower will be deposited into the relevant Fund Bank Account by no later than the business day following receipt. AMS will run direct debits daily. For all payments that have been dishonoured, AMS will produce an Arrears Report from the date of lodgement. AMS will arrange for those borrowers in arrears to be contacted and promote the clearance of such arrears. 8.2 General Insurance Policies AMS will ensure that the interest of the Trustee is duly and effectively noted on each General Insurance Policy, including mortgagee protection insurance policies for Strata Titles (in Victoria only). AMS will make reasonable efforts to ensure that each mortgagor pays all required premiums for insurance policies. If any premiums required to maintain such insurance policies are not paid by the relevant mortgagor when due, AMS will arrange for the amount required to make timely payment of such premium on behalf of the mortgagor, debiting the cost to the loan account. Advances made by AMS for payment of premiums due on insurance policies will be reimbursed from either the payment of a claim by the Approved Mortgage Insurer, late collections from the borrower or liquidation proceeds of the related mortgage property. Any required insurance policies will be issued by an Approved General Insurer. Any proceeds from a general insurance claim must be deposited with the Trustee, who will hold the funds in a separate bank account pending advice from AMS as to the application of the funds. The funds can be applied against the loan balance or the repair/reconstruction of the property improvements to which the claim related. 8.3 Lender's Mortgage Insurance Policies AMS will maintain in full force and effect at all times, as to each mortgage a Mortgage Insurance Policy insuring 100% of the mortgage principal plus interest, rates, maintenance expenses and enforcement costs. AMS shall cause the original of each Mortgage Insurance Certificate issued including any renewal certificate evidencing that such insurance is in effect to be delivered to the Trustee. AMS will perform and comply with or cause to be performed and complied with all requirements and conditions of each Mortgage Insurance Policy, including, without limitation, the giving of notices which are to be performed and observed by the insured or mortgagee thereunder as a condition to maintaining and keeping in force, or making a claim under, the insurance coverage provided by such Mortgage Insurance Policy, including, but not limited to, completion or restoration of the mortgaged property as required by the Mortgage Insurance Policy. AMS will make or cause to be made, in a timely manner all claims under any applicable Mortgage Insurance Policy on behalf of the Trustee. EXHIBIT 99.2 8 8.4 Mortgage Servicing AMS will service and administer or arrange for the servicing and administration of the mortgage loans and collect all moneys payable in respect of the mortgage loans on behalf of the Trustee in accordance with prudent mortgage loan servicing, management and administration standards and procedures performed by institutions servicing, managing and administering mortgage loans for their own account and in accordance with the requirements of the Approved Mortgage Insurer. AMS will take such steps and incur such expenses as are necessary to enforce the terms of each mortgage or otherwise exercise any of the rights conferred under each mortgage including the taking out of insurance policies over the mortgaged property, undertaking necessary repairs (subject to the Mortgage Insurance Policy and to the extent permitted by law) and paying rates, assessments and taxes levied thereon. Where AMS reasonably considers that any such expense will not be substantially recoverable from a mortgagor under a mortgage (or that a shortfall may be expected from the proceeds of enforcement of the security of the mortgage), it will seek instructions from the Approved Mortgage Insurer before taking such action. 9. MORTGAGE DISCHARGE 9.1 General A mortgagor may at any time, discharge its mortgage in full prior to the maturity date. AMS will ensure that the Approved Solicitor acting for the Trustee forwards the full amount of discharged funds plus any prepayment fees by cleared funds direct to the Collection Account on receipt. 9.2 Discharge Amount The amount to be paid to the Trustee at the maturity or early discharge of a mortgage will be calculated in accordance with the Operations Manual and will be final and binding. It will include: - outstanding loan balance; - interest and all other fees & charges (including prepayment fees /breakcosts if applicable) payable up to the date of discharge; and - any reasonable enforcement expenses. 10. DEFAULT PROCEDURES 10.1 Definition Default is a breach of any covenant contained in the mortgage document, loan contract or ancillary documentation. The most common default comprises the non- payment of repayments. Breaches of other covenants, for example the failure to renew general insurance or pay rates, assessments or taxes, and structural alteration of the security property are regarded equally as defaults and should be acted upon accordingly. It is important to note that a borrower is obliged to make the minimum monthly repayment as and when it is due, irrespective of whether lump sum payments have been made. Failure to make a payment constitutes a default under the loan contract. 10.2 Responsibilities AMS and its delegates shall diligently enforce the obligations of each mortgagor relating to the related mortgage loan and mortgage, including the obligation to promptly pay all moneys when due. AMS will ensure that correspondence is entered into with each defaulting mortgagor notwithstanding that the Trustee is the legal owner of each mortgage loan and mortgage subject to the rights of the Trustee as legal mortgagee. AMS will arrange for the administration of any default by a mortgagor and for recovering moneys owing to the Trustee, including selling the mortgaged property. EXHIBIT 99.2 9 10.3 Procedures Notification Upon receipt of the direct debit dishonour by the relevant financial institution, borrowers will be promptly contacted by telephone and advised of the dishonour. A letter should also be sent confirming the telephone conversation or detailing arrangements made. Arrangements to clear arrears Arrangements are to be implemented only upon receipt of written approval of the mortgage insurer and AMS. Arrears should be cleared within six months (maximum) although three months is the preferred time frame. It is preferred if all payments are made by direct debit. Borrowers are to provide evidence that the arrangement can be adhered to and that repayments can be maintained once the arrears are cleared. Once the equivalent of two payments have been missed a default notice must be forwarded to all parties irrespective of what arrangements have been made Legal Action Legal action is to commence when the equivalent of two payments or more have been missed if there has been no meaningful communication with borrowers or there is no prospect of clearing the arrears within six months, the mortgage insurer should be advised accordingly. Copies of the default notice should accompany instructions to solicitors. AMS will be guided by panel solicitors in relation to legal remedies and procedures as laws differ from state to state. The mortgage insurer is to be appraised of all steps. Possession Once possession has been obtained either voluntarily or by eviction, AMS will arrange for the following to occur: - Change locks on security property. - Order valuation requesting "Forced Sale" and "Fair Market" value. Valuers are to comment on the cost of repairs, the preferred method of sale and recommend a selling agent. - Obtain at least two marketing submissions. A recommendation is to be made to the mortgage insurer in respect to the preferred agent. The normal settlement period should be no longer than 60 days. AMS will ensure that a copy of the agreement is sent to the mortgage insurer. AMS or its delegates are authorised to execute the agreement subject to the mortgage insurer's written approval. Sale of Security Property - Contracts of Sale are to be executed by the Trustee who will not execute unless it is in receipt of (a) & (b) below. Where the property is being sold at auction or time does not permit the Contract to be executed, a panel solicitor, or agent may sign subject to: a. Confirmation of the reserve price and written approval from AMS and the mortgage insurer; and b. A letter from the solicitor confirming that the contract does not adversely affect the Trustee's position in exercising its power of sale pursuant to the relevant documentation; and c. Written approval from the Trustee. - Sale prices are to be agreed by AMS and the mortgage insurer in all cases. 10.4 Enforcement of credit contracts, mortgages and guarantees under the Consumer Credit Code. References made below to credit provider will extend to AMS and its delegates. Enforcement of a Loan Contract A credit provider is prevented from commencing enforcement proceedings against a debtor unless: a. the borrower is in default under the loan contract and each borrower and each guarantor has been given a default notice allowing the borrower a period of 30 days to remedy the default; b. the default has not been remedied within that period. EXHIBIT 99.2 10 Enforcement of the Mortgage A credit provider must not begin proceeding against a mortgagor to recover money or t take possession of, sell, appoint a receiver for or foreclose in relation to the mortgaged property unless the mortgagor is in default under the Mortgage and: a. the credit provider has given each mortgagor a default notice allowing the mortgagor 30 days to remedy the default; and b. the default has not been remedied within that period. Content of the Default Notice The default notice must contain specified information. The notice must state: a. the default; b. the action necessary to remedy the default; c. that the default must be remedied with a period of at least 30 days from the date of the notice; d. that a subsequent default of the same kind occurring within this 30 day period may be the subject of enforcement proceedings without further notice if that default is not remedied as well; e. how the borrower's liabilities under the credit contract would be affected by the operation of the acceleration clause; f. the amount required to pay out the contract as accelerated; Note that an 'acceleration clause' is a term of a credit contract or mortgage providing that: i. on the occurrence or non occurrence of a particular event, the credit provider becomes entitled to immediate payment of all, or a part, of an amount under the contract that would not otherwise have been immediately payable; or ii. whether or not on the occurrence or non-occurrence of a particular event, the credit provider has a discretion to require repayment of the amount of credit otherwise than by repayments fixed, or determined, on a basis stated, in the contract; but does not include any such term in the credit contract or mortgage that is an on-demand facility. Note that the ARMS Programme credit contracts are not on-demand facilities. The Credit Code is supplemental to local legislation regulating enforcement procedures. This default notice does not replace any other notices that may be required by local legislation in the State where the property is situated. AMS and its delegates will obtain their own legal advice as to how to best incorporate the default notice required under the Code with any notices which may be required under other legislation. The Default Notice for a Guarantor A credit provider must give a default notice to each guarantor if a default notice has been issued to the borrower. The default notice must be addressed, separately, to the guarantor. Service of a Default Notice The service nomination when giving a default notice does not apply, accordingly notices must be served individually. Enforcement without a Default Notice In certain instances the default notice and the 30 day waiting period is not required; these circumstances are outlined below: a. the credit provider reasonably believes that the borrower or mortgagor induced the credit provider to enter the contract by fraud; or b. the credit provider has made reasonable attempts to locate the borrower or the mortgagor but without success; or c. the court permits the credit provider to commence enforcement proceedings without the default notice. EXHIBIT 99.2 11 Procedure after Expiry of Notice When: a. the 30 day period has expired provided for by the notice expires; b. the borrower has not remedied the default; or c. the borrower has not asked AMS to postpone enforcement proceedings; AMS with the consent of the Mortgage Insurer and again subject to local legislation will commence court proceedings against the borrower to recover the amount due under the credit contract. Whilst the Code does not specify a time requirement for enforcement after the 30 days has lapsed, AMS requires the default to be actioned in a timely manner. Borrower's Options Borrowers, mortgagors and guarantors have several options after receiving a default notice. These options include: 1. If a borrower, mortgagor or guarantor remedies the default fully within the 30 days and no similar default continues beyond the 30 days, the contract is reinstated and any acceleration clause cannot operate. 2. If the maximum amount of the credit that is or may be provided under the contract is less than $125,000 the debtor may ask the credit provider to agree to a variation which is limited to: a. extending the term of the contract and reducing the amount of each payment; b. postponing during a specified period the dates when the payments are due; and c. extending the period of a contract and postponing during a specified period the dates on which payments are due. If the credit provider does not agree to the variation, the borrower, mortgagor or guarantor may apply to the court for appropriate orders. 3. If agreement is reached, the credit provider must within 30 days of the agreement give the borrower, and any guarantor under a guarantee related to the contract, a written notice setting out; a. particulars of the change in the terms of the credit contract; and b. any further information required by the Regulations. In addition, if the borrower's liabilities increase as a result, and the guarantee is to extend to those increased liabilities, the guarantor's consent to that extension must be obtained pursuant to s.56 of the Code. 4. If the amount of the credit is less than $125,000 the borrower, mortgagor or guarantor may apply to the credit provider to postpone enforcement proceedings. Again if agreement is not reached, the borrower, mortgagor or guarantor may apply to court. Enforcement of judgements against the Guarantor unless: The credit provider cannot enforce a judgement against the guarantor unless: a. the credit provider has obtained a judgement against the borrower for the payment of the guaranteed liability and the judgement remains unsatisfied for 30 days after the credit provider has made a written demand for payment of the judgement debt; or b. the court has relieved the credit provider from the obligation to obtain a judgement against the Borrower on the ground that recovery from the borrower is unlikely; or c. the credit provider has made reasonable attempts to locate the borrower but without success; or d. the borrower is insolvent. 10.5 Enforcement Expenses Enforcement expenses must be reasonably incurred and be of a reasonable amount. Enforcement expenses properly incurred, will be incurred on behalf of the Trustee and will be payable by the borrower, mortgagor or guarantor under the loan contract and or security. EXHIBIT 99.2 12 10.6 Arrears Reporting Reports will be provided, at least on a monthly basis, for all loans where one payment or more has been missed. AMS will ensure that relevant Mortgage Insurers are reported to separately and on a timely basis as per the relevant mortgage insurance policy. 10.7 Mortgage Insurance Claims AMS will arrange to have the mortgage insurance claims prepared and lodged with the relevant mortgage insurer. All relevant receipts and approvals for expenditure are to be attached to the claims. EXHIBIT 99.2 13 Appendix 2: Uniform Single Attestation Program for Mortgage Bankers Item USAP requirement Trust deed requirements - ---- ---------------- ----------------------- 1 Mortgage Principal, Interest and Amortisation - -------------------------------------------------------------------------------- 1.1 Reconciliations shall be MOSA, Clause 5.1 prepared on a monthly basis for ---------------- all custodial bank accounts and Required Degree of Skill and Care related bank clearing accounts. These reconciliations shall: "The Master Servicer must manage each Mortgage using the same degree o be mathematically of skill and care as would be used accurate; by a responsbile and prudent mortgagee and in accordance with: o be prepared within forty-five (45) calendar a) This Agreement; days after the cutoff date; b) The requirements of any Enhancement relating to or o be reviewed and approved covering that Mortgage; and by someone other than the person who prepared the c) The Agreed Procedures." reconciliation; and Master Trust Deed, Clause 20 o document explanations for ---------------------------- reconciling items. These Records and Financial Statements reconciling items shall be resolved within ninety "a) The Trust Manager must keep (90) calendar days of accounting and other records their original which correctly record and identification. explain the Assets and financial position of each Fund, and all transactions entered into by the Trustee as trustee of each Fund, in a manner which will enable the preparation from time to time of true and fair Financial Statements of each Fund and the auditing of those Financial Statements." We note that actual ASM procedures include: a) daily reconciliation of all bank accounts; b) the reconciliations are mathematically accurate; c) the reconciliations are reviewed by the team supervisor; d) reconciling items are cleared as soon as practicable with explanations sought for the differences. - -------------------------------------------------------------------------------- 1.2 Funds of the servicing entity No reference shall be advanced in cases where there is an overdraft in an investor's or a mortgagor's account. - -------------------------------------------------------------------------------- EXHIBIT 99.2 14 1.3 Each custodial account shall be Master Trust Deed, Clause 18 maintained at a federally ---------------------------- insured depository institution Opening of Trust Accounts in trust for the applicable investor "The Trustee: a) must, as directed by the Trust Manager, open a separate account with a Bank in respect of each Fund. Each such account must: i) be opened in the name of the Trustee; ii) bear a designation indicating the Fund to which it relates; and iii) in the case of a Rated Fund, be maintained with a Bank whose debt obligations are rated at all relevant times by the Designated Rating Agency, not lower than the Designated Rating; and b) may open such additional accounts with a Bank in respect of a Fund as the Trust maanger may direct." The following definitions are taken from the Master Trust Deed: "Bank means a corporation authorised under Part 2 of the Banking Act, 1959 to carry on banking business, including the general business of banking, in Australia, or a corporation formed of incorporated under an Act of the Parliament of an Australian Jurisdiction to carry on the general business of banking." "Designated Rating means, in relation to a person or an obligation, and a Rated Fund, each credit rating as specified or approved by each Designated Rating Agency for that Fund or for the obligations of the Trustee as trustee of that Fund." The following definition is taken from Schedule 3 of the Bond Trust Deed (Terms and Conditions of the Bonds) (is the same for all global funds): "Designated Rating has, in relation to the Bonds, the meaning set out in Condition 14.2." In Schedule 3 of the Bond Trust Deed, Condition 14.1 refers to the Designated Rating for the Bonds, and Condition 14.2 refers to the identity of the Designated Rating Agencies. Condition 14.3 refers to the Minimum Rating Requirements of all Authorised Investments as follows: Bond Trust Deed, Schedule 3, Terms and Conditions of the Bonds, Condition 14.3 ------------------------------------ Minimum Rating Requirements "Subject to Condition 6.3, all Authorised Investments of the Fund other than cash and Mortgages must be rated "AAA" or "A-1+" by S&P, "Aaa" or "P1" by Moody's and "AAA" or "F1+" by Fitch Ratings (or in any such case, such other credit rating as the relevant Designated Rating Agency may from time to time agree) and must mature such that the Issuer is able to meet its obligations under the Transaction Documents as they fall due." While Condition 14.3 only relates directly to Authorised Investments and does not directly stipulate a Designated Rating for the Trust account, the above ratings may reasonably be assumed to represent the "Designated Rating" in relation to each Trust Account. All Collection Accounts are currently held in the name of the trustee in its capacity as trustee of each Fund by Westpac Banking Corporation which is rated: o Long term AA- by S&P and Aa3 by Moody's; and o Short term A-1+ by S&P and P1 by Moody's. The following clause in relation to the Cash Reserve applies to all 3 global funds (and may be found at the same reference in each set of Transaction Documents): EXHIBIT 99.2 15 Bond Trust Deed, Schedule 3, Terms and Conditions of the Bonds, Condition 6.3 ------------------------------------ "Amounts credited to the Cash Reserve Account must beinvested in Authorised Investments: (a) which are rated "AAA" or "A-1+" by S&P, "Aaa" or "P1" by Moody's and "AAA" or "F1+" by Fitch Ratings or such other rating determined from time to time by the Trust Manager (subject to each Designated Rating Agency confirming that such other rating will not cause the rating assigned by it to Bonds to be downgraded below the Designated Rating, qualified or withdrawn); (b) will mature not later than the Payment Date immediately after the date on which they are made; and (c) which are otherwise made in accordance with the Master Trust Deed." - -------------------------------------------------------------------------------- 1.4 Escrow funds held in trust for Escrow accounts - NA a mortgagor shall be returned to the mortgagor within thirty (30) calendar days of payoff of the mortgage loan - -------------------------------------------------------------------------------- 2 Mortgage Payments - -------------------------------------------------------------------------------- 2.1 Mortgage payments shall be Agreed Procedures, Clause 8.1 deposited into the custodial ----------------------------- bank accounts and related bank "Any mortgage proceeds received clearing accounts within two directly from the Borrower will be business days of receipt deposited into the relevant Fund Bank Account by no later than the business day following receipt." MOSA, Clause 7.1 ---------------- "The Master Servicer must immediately (and in any event within one Business Day of receipt) pay to the Trustee all money which it receives under or in connection with any Mortgage Document or as a result of or in connection with the exercise of any Power under any Mortgage Document." - -------------------------------------------------------------------------------- 2.2 Mortgage payments made in MOSA, Clause 7.4 accordance with the mortgagor's ---------------- loan documents shall be posted "The Master Servicer must keep to the applicable mortgagor accounting and other records which records within two business correctly record and explain: days of receipt a) the origination and settlement of each Mortgage; b) the entering into of all Mortgage Documents entered into in connection with each Mortgage; c) all payments made and received by or on behalf of the Trustee under each Mortgage Document; d) all action taken in the exercise of any Power; and e) the financial position at any time in relation to each Mortgage in a manner which will enable the preparation from time to time of accounts and other financial statements in accordance with the requirements of all applicable Laws and otherwise in such form as the Trustee from time to time requires. These accounting and other records must be kept in such form and using such data storage, access and retrieval methods as are set out in the Agreed Procedures." Note a time frame is not specified here but refer to MOSA clause 5.1 requireing a "degree of skill and care as would be used by a responsbile and prudent mortgagee". - -------------------------------------------------------------------------------- 2.3 Mortgage payments shall be See item 2.2 directly above - MOSA, allocated to principal, Clause 7.4 re Keeping of accounting interest, insurance, taxes or and other records. other escrow items in accordance with the mortgagor's loan documents - -------------------------------------------------------------------------------- 2.4 Mortgage payments identified as Agreed Procedures, Clause 9.2 loan payoffs shall be allocated ----------------------------- in accordance with the "The amount to be paid to the mortgagor's loan documents Trustee at the maturity or early discharge of a mortgage will be calculated in accordance with the Operations Manual and will be final and binding. It will include: o outstanding loan balance; o interest and all other fees & charges (including prepayment fees / break costs is applicable) payable up to the date of discharge; and o any reasonable enforcement expenses." - -------------------------------------------------------------------------------- EXHIBIT 99.2 16 3 Disbursements - -------------------------------------------------------------------------------- 3.1 Disbursements made via wire Master Trust Deed, Clause 18.3 transfer on behalf of a ------------------------------ mortgagor or investor shall be Authorised Signatories made only by authorized personnel. "The Trustee must ensure that the only authorised signatories for any Trust Account are officers or employees of the Trustee." - -------------------------------------------------------------------------------- 3.2 Disbursements made on behalf of Mortgagors - see item 2.2 above, a mortgagor or investor shall MOSA, Clause 7.4 re Keeping of be posted within two business accounting and other records. days to the mortgagor's or investor's records maintained Investors - the following clause by the servicing entity. from the Bond Trust Deed applies. The reference and the intent of the clause is the same for all 3 global funds; note however there are some slight variations in the wording between the 3 sets of Transaction Documents due to the differing structures (for example, Global 3 refers also to Fast Prepayment Bonds and Euro Bonds). The following is from the Bond Trust Deed for Global Fund 1. Bond Trust Deed, Clause 11.1 ---------------------------- Details to be kept on the Register "The Issuer must, subject to clause 11.8, keep a register in relation to the A$ Bonds (the A$ Register) and a register in relation to the Class A Bonds (the US$ Register) in which shall be inscribed the following information in respect of the A$ Bonds or Class A Bonds (as the case may be): a) the Issue Date for such Bonds; b) the number and Face Value of such Bonds issued on each Issue Date; c) the Conditions (and any amendments or variations thereto made pursuant to caluse 16) for all such Bonds; d) the name, address and tax file or tax identification number of each holder of such Bonds; e) the number of such Bonds held by each Bondholder; f) in the case of A$ Bonds, details of any Registration Confirmation issued to a Bondholder; g) the date on which a person was entered as the holder of such bonds; h) the date on which a person ceased to be a Bondholder of such Bonds; i) the account to which any payments due to a Bondholder or such Bonds areto be made (if applicable); j) a record of each payment in respect of such Bonds (including the then Face Value of such Bonds); and k) such other information as the Issuer or the Trust Manager considers necessary or desirable." Note however that no timeframe is stipulated (in contrast to 2 business days stipulated by USAP). We note that ASM's actual procedures ensure that mortgagor or investor disbursements are posted within two business days. - -------------------------------------------------------------------------------- EXHIBIT 99.2 17 3.3 Tax and insurance payments Taxes are paid in priority to all shall be made on or before the other expenses of each Fund, as penalty or insurance policy documented under Condition 4.4 of expiration dates, as indicated the Terms and Conditions of the on tax bills and insurance Bonds annexed to each Bond Trust premium notices, respectively, Deed: provided that such support has been received by the servicing Bond Trust Deed, Schedule 3, Terms entity at least thirty (30) and Conditions of the Bonds, calendar days prior to these Condition 4.4 dates ------------------------------------ Application of Interest Collections "Subject to these Conditions, on each Payment Date, the Trust Manager must direct the Issuer to, and the Issuer must, apply or cause to be applied, the Interest Collections for the relevant Calculation Period as follows: a) (Taxes) First, in or towards payment or reimbursement of all taxes in respect of the Fund payable or paid during that Calculation Period or which the Issuer on the advice of the Trust Manager considers it necessary, on or before the date which is three Business Days before the Payment Date relating to that Calculation Period, to make provision for; b) (Expenses) second, in or towards......." With regard to insurance, AMS is obliged under the Agreed Procedures to maintain LMI and, to the extent possible, General Insurance Policies: Agreed Procedures, clause 8.2 ----------------------------- General Insurance Policies "AMS will ensure that the interest of the Trustee is duly and effectively noted on each General Insurance Policy, including mortgagee protection insurance policies for Strata Titles (in Victoria only). AMS will make reasonable efforts to ensure that each mortgagor pays all required premiums for insurance policies. If any premiums required to maintain such insurance policies are not paid by the relevant mortgagor when due, AMS will arrange for the amount required to make timely payment of such premium on behalf of the mortgagor, debiting the cost to the loan account. Advances made by AMS for payment of premiums due on insurance policies will be reimbursed from either the payment of a claim by the Approved Mortgage Insurer, late collections from the borrower or liquidation proceeds of the related mortgage property. Any required insurance policies will be issued by an Approved General Insurer." Agreed Procedures, clause 8.3 ----------------------------- Lender's Mortgage Insurance Policies "AMS will maintain in full force and effect at all times, as to each mortgage a Mortgage Insurance Policy insuring 100% of the mortgage principal plus interest, rates, maintenance expenses and enforcement costs." - -------------------------------------------------------------------------------- 3.4 Any late payment penalties paid MOSA, Clause 11.1 in conjunction with the payment ----------------- of any tax bill or insurance Master Servicer to Bear Own Costs premium notice shall be paid from the servicing entity's "The Master Servicer must pay all funds and not charged to the costs and expenses of performing its mortgagor, unless the late obligations under this Agreement, payment was due to the and is not entitled to reimbursement mortgagor's error or omission or compensation from the Trustee except to the extent expressly stated in this Agreement." - -------------------------------------------------------------------------------- 3.5 Amounts remitted to investors See item 1.1 - Master Trust Deed, per the servicer's investor Clause 20, re Records and Financial reports shall agree with Statements canceled checks or other form of payment, or custodial bank statements - -------------------------------------------------------------------------------- 3.6 Unissued checks shall be Not applicable - no unissued checks. safeguarded so as to prevent unauthorized access - -------------------------------------------------------------------------------- EXHIBIT 99.2 18 4 Investor Accounting and Reporting - -------------------------------------------------------------------------------- 4.1 The servicing entity's investor Bond Trust Deed, Clause 12.1(f) reports shall agree with, or ------------------------------- reconcile to, investors' Bondholders Report records on a monthly basis as to the total unpaid principal "In the case of the Trust Manager balance and number of loans only, deliver to the Principal serviced by the servicing Paying Agent, the Issuer and the entity Class A Bond Trustee within 5 Business Days of each Payment Date, the Bondholders Report for the related Calculation Period, with written instructions for the Class A Bond Trustee to forward the Bondholders Report to each Class A Bondholder. Each Bondholders Report shall contain the information set out in Schedule 8; ..." Note there is no requirement in this document to provide reports MONTHLY. The clause specifies only "within 5 days of each Payment Date", which is quarterly. Also, the Bondholders Report in Schedule 8 stipulates that the unpaid principal balance is reported but does NOT specify that the number of loans should be reported. - -------------------------------------------------------------------------------- 5 Mortgage Loan Accounting - -------------------------------------------------------------------------------- 5.1 The servicing entity's mortgage MOSA, Clause 7.4 loan records shall agree with, ---------------- or reconcile to, the records of See item 2.3 above - refer mortgagors with respect to the especially to part (e) where it unpaid principal balance on a specifies that "The Master Servicer monthly basis must keep accounting and other records which correctly record and explain ..... the financial position at any time in relation to each Mortgage..." - -------------------------------------------------------------------------------- 5.2 Adjustments on loans shall be No reference computed based on the related mortgage note - -------------------------------------------------------------------------------- 5.3 Escrow accounts shall be Escrow accounts - NA analyzed, in accordance with the mortgagor's loan documents, on at least an annual basis - -------------------------------------------------------------------------------- 5.4 Interest on escrow accounts Escrow accounts - NA shall be paid, or credited, to mortgagors in accordance with the applicable state laws - -------------------------------------------------------------------------------- EXHIBIT 99.2 19 6 Deliquencies - -------------------------------------------------------------------------------- 6.1 Records documenting collection Agreed Procedures, Clause 8.1 efforts shall be maintained ----------------------------- during the period a loan is in "AMS will run direct debits daily. default and shall be updated at For all payments that have been least monthly. Such records dishonoured, AMS will produce an shall describe the entity's Arrears Report from the date of activities in monitoring lodgement. AMS will arrange for delinquent loans including, for those borrowers in arrears to be example, phone calls, letters contacted and promote the clearance and mortgage payment of such arrears." rescheduling plans in cases where the delinquency is deemed Agreed Procedures, Clause 8.4 temporary (e.g., illness or ----------------------------- unemployment). "AMS will service and administer or arrange for the servicing and administration of the mortgage loans and collect all moneys payable in respect of the mortgage loans on behalf of the Trustee in accordance with prudent mortgage loan servicing, management and administration standards and procedures performed by institutions servicing, managing and administering mortgage loans for their own account and in accordance with the requirements of the Approved Mortgage Insurer. AMS will take such steps and incur such expenses as are necessary to enforce the terms of each mortgage or otherwise exercise any of the rights conferred under each mortgage including the taking out of insurance policies over the mortgaged property, undertaking necessary repairs (subject to the Mortgage Insurance Policy and to the extent permitted by law) and paying rates, assessments and taxes levied thereon. Where AMS reasonably considers that any such expense will not be substantially recoverable from a mortgagor under a mortgage (or that a shortfall may be expected from the proceeds of enforcement of the security of the mortgage), it will seek instructions from the Approved Mortgage Insurer before taking such action." Agreed Procedures, Clause 10 ---------------------------- Entire clause deals with "Default Procedures." Some specific references which may be relevant are: Clause 10.3 Procedures "Notification Upon receipt of the direct debit dishonour by the relevant financial institution, borrowers will be promptly contacted by telephone and advised of the dishonour. A letter should also be sent confirming the telephone conversation or detailing arrangements made. Arrangements to clear arrears Arrangements are to be implemented only upon receipt of written approval of the mortgage insurer and AMS. Arrears should be cleared within six months (maximum) although three months is the preferred time frame. It is preferred if all payments are made by direct debit. Borrowers are to provide evidence that the arrangement can be adhered to and that repayments can be maintained once the arrears are cleared. Once the equivalent of two payments have been missed a default notice must be forwarded to all parties irrespective of what arrangements have been made EXHIBIT 99.2 20 Legal Action Legal action is to commence when the equivalent of two payments or more have been missed if there has been no meaningful communication with borrowers or there is no prospect of clearing the arrears within six months, the mortgage insurer should be advised accordingly. Copies of the default notice should accompany instructions to solicitors. AMS will be guided by panel solicitors in relation to legal remedies and procedures as laws differ from state to state. The mortgage insurer is to be appraised of all steps." Clause 10.6 Arrears Reporting "Reports will be provided, at least on a monthly basis, for all loans where one payment or more has been missed. AMS will ensure that relevant Mortgage Insurers are reported to separately and on a timely basis as per the relevant mortgage insurance policy." MOSA, Clause 9.1 ---------------- "Procedures on Default The Master Servicer must, subject to clause 9.5, take such action following the occurrence of an Event of Default, and enforce the Powers (including by taking legal procedings) in respect of any Defaulting Mortgage in such manner as: a) the Master Servicer reasonable considers necessary to: i) remedy that Event of Default; ii) recover the money secured by that Defaulting Mortgage; and iii) protect and preserve the rights of the Trustee as mortgagee and the interest of Bondholders under the Master Trust Deed and Security Trust Deed; and b) is required to ensure that any losses suffered in relation to that Mortgage which are, or are required to be insured under a Mortgage Insurance Policy are able to be claimed under that Mortgage Insurance Policy." - -------------------------------------------------------------------------------- 7 Insurance Policies - -------------------------------------------------------------------------------- 7.1 A fidelity bond and errors and There is no document compelling AMS omissions policy shall be in in its capacity as Master Servicer effect on the servicing entity to hold a PI policy. No throughout the reporting period representations to investors have in the amount of coverage been made in any Information represented to investors in Memorandum in respect of any amount management's assertion of cover held. However AMS does hold a current PI policy (cover A$10M). - -------------------------------------------------------------------------------- EX-99 5 form10k_2ex99-3sf092804.txt EXHIBIT 99.3 - COMPLIANCE CERTIFICATE [AMS LOGO OMITTED] 27 September 2004 EXHIBIT 99.3 Officer's Certificate of Compliance in relation to ARMS II Global Fund 2 (the "Fund") This back-up certification is delivered in connection with the certification provided by Gavin Buchanan of Australian Securitisation Management Pty Limited ("ASM") contained in ASM's annual reports filed with the Securities and Exchange Commission (the "SEC"). The undersigned hereby certifies to the best of his or her knowledge and after reasonable investigation that: 1. I, Paul McMahon, am an employee of Wizard Home Loans Pty Limited, which ultimately owns 100% of Australian Mortgage Securities Limited ("AMS"); 2. I, Paul McMahon, am responsible for the servicing and reporting function of ARMS II Global Fund 2; 3. I, Paul McMahon, am responsible for reviewing the activities performed by the servicer under the pooling and servicing, or similar, agreement; 4. I, Paul McMahon, have reviewed the annual report on Form 10-K (the "Form 10-K"), and all reports on Form 6-K and Form 8-K, as amended, each attached hereto as Schedule I, of the Fund (together, the "Reports"); and 5. Based upon the review required under the pooling and servicing, or similar, agreement, and except as disclosed in the annual Reports, the servicer has fulfilled its obligations under the servicing agreement. Date: 27 September 2004 /s/ Paul McMahon - ------------------------ Paul McMahon Principal Financial Officer Australian Mortgage Securities Limited
Level 6 Telephone +61 2 9225 0800 Australian Mortgage Securities Ltd 12 Castlereagh Street Facsimile +61 2 9225 0888 ABN 89 003 072 446 Sydney NSW 2000 E-mail info@ams.com.au PO Box R807 Royal Exchange NSW 1225
SCHEDULE 1 ---------------------------------------------------------------------------------------------------------------- Bond Trust Deed ARMS II GLOBAL FUND 2 Schedule 8 AMENDED BONDHOLDERS REPORT Reference ---------------------------------------------------------------------------------------------------------------- REPORTING DATES Cut-Off Date December 31, 2003 Determination Date January 8, 2004 Payment Date January 12, 2004 Start Interest Period October 30, 2003 End Interest Period January 11, 2004 No of Days in Interest Period 74 Start Calculation Period October 30, 2003 End Calculation Period December 31, 2003 No of Days in Calculation Period 63 ---------------------------------------------------------------------------------------------------------------- SECURITIES ON ISSUE Amount Amount (US$) (A$) Class A Bonds Initial Face Value 1,000,000,000 1,428,571,429 Previous Principal Distribution - - Principal Distribution for current calculation period 28,800,000 41,142,857 Total Principal Distribution to date 28,800,000 41,142,857 - Beginning Principal Amount 1,000,000,000 1,428,571,429 (a) Ending Principal Amount 971,200,000 1,387,428,571 less Unreimbursed Charge-offs - - Beginning Stated Amount 1,000,000,000 1,428,571,429 (a) Ending Stated Amount 971,200,000 1,387,428,571 Class B Bonds Initial Face Value 33,500,000 47,857,143 Previous Principal Distribution - - Principal Distribution for current calculation period - - Total Principal Distribution to date - - Beginning Principal Amount 33,500,000 47,857,143 (a) Ending Principal Amount 33,500,000 47,857,143 less Unreimbursed Charge-offs - - Beginning Stated Amount 33,500,000 47,857,143 (a) Ending Stated Amount 33,500,000 47,857,143 ----------------------------------------------------------------------------------------------------------------
INTEREST RATE FOR ACCRUAL PERIOD Libor / Interest Interest Bank Bill Rate Margin Rate USD Class A Bonds 1.14651 0.25000 1.39651 Class B Bonds 1.14651 0.75000 1.89651 AUD Class A Bonds (payable to Currency Swap Provider) 4.9706 0.4229 5.3935 Class B Bonds 4.9706 0.9731 5.9437 ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAYABLE ON PAYMENT DATE $US $A Interest Entitlement: (b) Class A Bonds 2,870,600 15,621,096 (b) Class B Bonds 130,596 576,690 Principal Repayment: (c) Class A Bonds 28,800,000 41,142,857 (c) Class B Bonds - - Total: Class A Bonds 31,670,600 56,763,953 Class B Bonds 130,596 576,690 Total 31,801,196 57,340,643 ---------------------------------------------------------------------------------------------------------------- POOL FACTORS Last Current Distribution Distribution Date Date (h) Class A Bonds 1.0000 0.9712 Class B Bonds 1.0000 1.0000 ---------------------------------------------------------------------------------------------------------------- (d) INCOME COLLECTIONS FOR CALCULATION PERIOD 17,168,777 ---------------------------------------------------------------------------------------------------------------- AVAILABLE AMORTISATION AMOUNT $AUD (i) Scheduled Principal Collections 1,708,290 (i) Unscheduled Principal Collections 70,095,747 Gross Principal Collections 71,804,036 less (g) Redraw Advances, Line of Credit Advances and Permitted Further Advances 29,887,789 (e) Net Principal Collections 41,916,247 Application of Cash Reserve and Advances Reserve as Available Amortisation Amount (773,390) (l) Charge-offs and Unreimbursed Charge-offs 0 (f) Available Amortisation Amount 41,142,857 ---------------------------------------------------------------------------------------------------------------- PORTFOLIO INFORMATION (based on Loans forming part of the Assets of the Fund as at the last day of the Calculation Period) (j) Aggregate Face Value of Loans 1,430,932,701 Total number of Loans 5,647 Average Loan Balance 253,396.97 Weighted Average LVR 72.72
Seasoning No of Loans % by number Balance % by balance 0 to 6 months 3,449 61.08% 874,502,045 61.11% 6 to 12 months 1,707 30.23% 432,567,911 30.23% 12 to 18 months 311 5.51% 81,849,580 5.72% 18 to 24 months 96 1.70% 23,586,679 1.65% 24 to 36 months 54 0.96% 14,207,183 0.99% 36 to 48 months 4 0.07% 914,886 0.06% 48 to 60 months 2 0.04% 484,848 0.03% >60 months 24 0.43% 2,819,569 0.20% 5,647 100.0% 1,430,932,701 100.00% ----------------------------------------------------------------------------------------------------------------
(k) AGGREGATE LOSS AMOUNT NIL ---------------------------------------------------------------------------------------------------------------- (m) DELINQUENCY AND LOSSES Delinquency AUD Amount % of of Loans Pool 31 - 60 days 9,444,156 0.66% 61 - 90 days 3,434,238 0.24% 90+ days 2,003,306 0.14% Losses AUD Mortgage Insurance claims made Nil Mortgage Insurance claims paid Nil Mortgage Insurance claims pending Nil Mortgage Insurance claims denied Nil ----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------- Bond Trust Deed ARMS II GLOBAL FUND 2 Schedule 8 AMENDED BONDHOLDERS REPORT Reference ---------------------------------------------------------------------------------------------------------------- REPORTING DATES Cut-Off Date March 31, 2004 Determination Date April 7, 2004 Payment Date April 13, 2004 Start Interest Period January 12, 2004 End Interest Period April 12, 2004 No of Days in Interest Period 92 Start Calculation Period #NAME? End Calculation Period March 31, 2004 No of Days in Calculation Period #NAME? ---------------------------------------------------------------------------------------------------------------- SECURITIES ON ISSUE Amount Amount (US$) (A$) Class A Bonds Initial Face Value 1,000,000,000 1,428,571,429 Previous Principal Distribution 28,800,000 41,142,857 Principal Distribution for current calculation period 50,400,000 72,000,000 Total Principal Distribution to date 79,200,000 113,142,857 - Beginning Principal Amount 971,200,000 1,387,428,571 (a) Ending Principal Amount 920,800,000 1,315,428,571 less Unreimbursed Charge-offs - - Beginning Stated Amount 971,200,000 1,387,428,571 (a) Ending Stated Amount 920,800,000 1,315,428,571 Class B Bonds Initial Face Value 33,500,000 47,857,143 Previous Principal Distribution - - Principal Distribution for current calculation period - - Total Principal Distribution to date - - Beginning Principal Amount 33,500,000 47,857,143 (a) Ending Principal Amount 33,500,000 47,857,143 less Unreimbursed Charge-offs - - Beginning Stated Amount 33,500,000 47,857,143 (a) Ending Stated Amount 33,500,000 47,857,143 ----------------------------------------------------------------------------------------------------------------
INTEREST RATE FOR ACCRUAL PERIOD Libor / Interest Interest Bank Bill Rate Margin Rate USD Class A Bonds 1.14000 0.25000 1.39000 Class B Bonds 1.14000 0.75000 1.89000 AUD Class A Bonds (payable to Currency Swap Provider) 5.5050 0.4229 5.9279 Class B Bonds 5.5050 0.9731 6.4781 ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAYABLE ON PAYMENT DATE $US $A Interest Entitlement: (b) Class A Bonds 3,449,900 20,730,342 (b) Class B Bonds 161,805 781,429 Principal Repayment: (c) Class A Bonds 50,400,000 72,000,000 (c) Class B Bonds - - Total: Class A Bonds 53,849,900 92,730,342 Class B Bonds 161,805 781,429 Total 54,011,705 93,511,771 ---------------------------------------------------------------------------------------------------------------- POOL FACTORS Last Current Distribution Distribution Date Date (h) Class A Bonds 0.9712 0.9208 Class B Bonds 1.0000 1.0000 ---------------------------------------------------------------------------------------------------------------- (d) INCOME COLLECTIONS FOR CALCULATION PERIOD 25,262,009 ---------------------------------------------------------------------------------------------------------------- AVAILABLE AMORTISATION AMOUNT $AUD (i) Scheduled Principal Collections 2,238,268 (i) Unscheduled Principal Collections 106,525,574 Gross Principal Collections 108,763,842 less (g) Redraw Advances, Line of Credit Advances and Permitted Further Advances 36,664,139 (e) Net Principal Collections 72,099,703 Application of Cash Reserve and Advances Reserve as Available Amortisation Amount (99,703) (l) Charge-offs and Unreimbursed Charge-offs 0 (f) Available Amortisation Amount 72,000,000 ---------------------------------------------------------------------------------------------------------------- PORTFOLIO INFORMATION (based on Loans forming part of the Assets of the Fund as at the last day of the Calculation Period) (j) Aggregate Face Value of Loans 1,359,063,833 Total number of Loans 5,345 Average Loan Balance 254,268.26 Weighted Average LVR 72.34
Seasoning No of Loans % by number Balance % by balance 0 to 6 months - 0.00% - 0.00% 6 to 12 months 4,713 88.18% 1,197,470,979 88.11% 12 to 18 months 396 7.41% 105,000,915 7.73% 18 to 24 months 112 2.10% 28,270,392 2.08% 24 to 36 months 92 1.72% 23,602,759 1.74% 36 to 48 months 6 0.11% 1,494,304 0.11% 48 to 60 months 2 0.04% 482,437 0.04% >60 months 24 0.45% 2,742,047 0.20% 5,345 100.0% 1,359,063,833 100.00% ----------------------------------------------------------------------------------------------------------------
(k) AGGREGATE LOSS AMOUNT NIL ---------------------------------------------------------------------------------------------------------------- (m) DELINQUENCY AND LOSSES Delinquency AUD Amount % of of Loans Pool 31 - 60 days 13,726,545 1.01% 61 - 90 days 3,700,890 0.27% 90+ days 3,667,537 0.27% Losses AUD Mortgage Insurance claims made Nil Mortgage Insurance claims paid Nil Mortgage Insurance claims pending Nil Mortgage Insurance claims denied Nil ----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------- Bond Trust Deed ARMS II GLOBAL FUND 2 Schedule 8 AMENDED BONDHOLDERS REPORT Reference ---------------------------------------------------------------------------------------------------------------- REPORTING DATES Cut-Off Date June 30, 2004 Determination Date July 8, 2004 Payment Date July 12, 2004 Start Interest Period April 13, 2004 End Interest Period July 11, 2004 No of Days in Interest Period 90 Start Calculation Period #NAME? End Calculation Period June 30, 2004 No of Days in Calculation Period #NAME? ---------------------------------------------------------------------------------------------------------------- SECURITIES ON ISSUE Amount Amount (US$) (A$) Class A Bonds Initial Face Value 1,000,000,000 1,428,571,429 Previous Principal Distribution 79,200,000 113,142,857 Principal Distribution for current calculation period 55,900,000 79,857,143 Total Principal Distribution to date 135,100,000 193,000,000 - Beginning Principal Amount 920,800,000 1,315,428,571 (a) Ending Principal Amount 864,900,000 1,235,571,429 less Unreimbursed Charge-offs - - Beginning Stated Amount 920,800,000 1,315,428,571 (a) Ending Stated Amount 864,900,000 1,235,571,429 Class B Bonds Initial Face Value 33,500,000 47,857,143 Previous Principal Distribution - - Principal Distribution for current calculation period - - Total Principal Distribution to date - - Beginning Principal Amount 33,500,000 47,857,143 (a) Ending Principal Amount 33,500,000 47,857,143 less Unreimbursed Charge-offs - - Beginning Stated Amount 33,500,000 47,857,143 (a) Ending Stated Amount 33,500,000 47,857,143 ----------------------------------------------------------------------------------------------------------------
INTEREST RATE FOR ACCRUAL PERIOD Libor / Interest Interest Bank Bill Rate Margin Rate USD Class A Bonds 1.14000 0.25000 1.39000 Class B Bonds 1.14000 0.75000 1.89000 AUD Class A Bonds (payable to Currency Swap Provider) 5.5400 0.4229 5.9629 Class B Bonds 5.5400 0.9731 6.5131 ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAYABLE ON PAYMENT DATE $US $A Interest Entitlement: (b) Class A Bonds 3,199,800 19,340,800 (b) Class B Bonds 158,288 768,571 Principal Repayment: (c) Class A Bonds 55,900,000 79,857,143 (c) Class B Bonds - - Total: Class A Bonds 59,099,800 99,197,943 Class B Bonds 158,288 768,571 Total 59,258,088 99,966,514 ---------------------------------------------------------------------------------------------------------------- POOL FACTORS Last Current Distribution Distribution Date Date (h) Class A Bonds 0.9208 0.8649 Class B Bonds 1.0000 1.0000 ---------------------------------------------------------------------------------------------------------------- (d) INCOME COLLECTIONS FOR CALCULATION PERIOD 24,862,963 ---------------------------------------------------------------------------------------------------------------- AVAILABLE AMORTISATION AMOUNT $AUD (i) Scheduled Principal Collections 2,258,299 (i) Unscheduled Principal Collections 116,565,262 Gross Principal Collections 118,823,561 less (g) Redraw Advances, Line of Credit Advances and Permitted Further Advances 38,856,438 (e) Net Principal Collections 79,967,123 Application of Cash Reserve and Advances Reserve as Available Amortisation Amount (109,980) (l) Charge-offs and Unreimbursed Charge-offs 0 (f) Available Amortisation Amount 79,857,143 ---------------------------------------------------------------------------------------------------------------- PORTFOLIO INFORMATION (based on Loans forming part of the Assets of the Fund as at the last day of the Calculation Period) (j) Aggregate Face Value of Loans 1,279,154,460 Total number of Loans 5,002 Average Loan Balance 255,728.60 Weighted Average LVR 72.19
Seasoning No of Loans % by number Balance % by balance 0 to 6 months - 0.00% - 0.00% 6 to 12 months 3,132 62.61% 800,994,514 62.62% 12 to 18 months 1,480 29.59% 379,073,094 29.63% 18 to 24 months 242 4.84% 64,119,239 5.01% 24 to 36 months 118 2.36% 29,345,086 2.29% 36 to 48 months 10 0.20% 3,119,018 0.24% 48 to 60 months - 0.00% - 0.00% >60 months 20 0.40% 2,503,509 0.20% 5,002 100.0% 1,279,154,460 100.00% ----------------------------------------------------------------------------------------------------------------
(k) AGGREGATE LOSS AMOUNT NIL ---------------------------------------------------------------------------------------------------------------- (m) DELINQUENCY AND LOSSES Delinquency AUD Amount % of of Loans Pool 31 - 60 days 9,721,574 0.76% 61 - 90 days 3,325,802 0.26% 90+ days 6,907,434 0.54% Losses AUD Mortgage Insurance claims made Nil Mortgage Insurance claims paid Nil Mortgage Insurance claims pending Nil Mortgage Insurance claims denied Nil ----------------------------------------------------------------------------------------------------------------
-----END PRIVACY-ENHANCED MESSAGE-----