Ratings

Table 1 Preliminary Ratings As Of Nov. 20, 2009
Class	Preliminary rating*	Preliminary amount (A$)	Minimum credit support (%)	Credit support provided (%)
A-2	AAA	698,000,000	15.2	19.5
B	A	71,000,000	8.4	11.3
C	BBB	32,000,000	5.4	7.6
D	BB	11,200,000	4.3	6.3
E	B	11,200,000	3.5	5.0
Seller	N.R.	43,300,000	N/A	N/A
*The rating on each class of securities is preliminary and subject to change at any time. N.R.�??Not rated. N/A�??Not applicable.

Expected closing date: Nov. 24, 2009

Final maturity date: March 19, 2016

Collateral: Receivables generated by a pool of commercial hire purchase, chattel mortgage and secured loan contracts backed by motor vehicles

Issuer: BNY Trust Co. of Australia Ltd. as trustee of Bella Trust Series 2009-1

Seller and Servicer: Capital Finance Australia Ltd

Manager: Bank of Scotland plc, Australia Branch

This is the first securitization of collateral originated by Capital Finance Australia Ltd. (CFAL). The preliminary ratings assigned to the notes to be issued by BNY Trust Co. of Australia Ltd. as trustee of Bella Trust Series 2009-1 (the issuer) reflect:

• The issuer's capacity to pay interest to the note holders in full on each interest payment date, and to repay principal in full no later than the final maturity date, according to the terms and conditions of the notes.
• The credit support provided for each class of notes in the form of subordination.
• The liquidity support provided for the transaction in the form of: an amortizing liquidity reserve, which is equal to 1.0% of the initial invested amount of the notes and is subject to a floor of A$500,000; and the ability to use principal collections to meet short-term liquidity demands.
• All contract payments, including the residual or balloon payments, being an obligation of the borrowers. As a result, the issuer is not exposed to any market-value risk associated with the sale of the motor vehicles (on performing loans), which is a risk that may be associated with other products such as operating leases.
• The benefit of a fixed-to-floating interest rate swap provided by Bank of Scotland PLC, Australia Branch (A+/Stable/A-1), to hedge the mismatch between the fixed-rate payments on the receivables, and the floating-rate coupon payable on the class A notes.

In Standard & Poor's opinion, the strengths of the transaction observed in the rating analysis are:

• The pool is a closed pool, with no substitution of receivables.
• The credit support for each class of notes in the form of subordination exceeds the minimum credit support as determined in Standard & Poor's credit assessment.
• The entire pool comprises receivables backed by passenger and light commercial motor vehicles. Standard & Poor's has taken this into account in its assessment of the minimum credit support at each rating level by giving credit to recoveries.
• The collateral pool is reasonably well-seasoned, with a weighted average contract seasoning of 23.1 months.

In Standard & Poor's opinion, the weaknesses of the transaction observed in the rating analysis are:

• Around 40.3% of the pool comprises contracts that are partly amortizing, with balloon contracts due at the end of the contracts. However, the weighted average balloon payment (including zero balloons) is relatively low, at 13.0%, and the balloon maturity dates are diversified throughout the term of the transaction. In addition, the impact of balloon payments has been factored into Standard & Poor's cash flow analysis.
• If certain step-down tests are satisfied, the principal payment structure may switch from sequential pay to one which allows repayment of principal on the class A, class B, and class C notes on a pro-rata basis. Nevertheless, Standard & Poor's is satisfied that the step-down test should ensure that principal is not stepped down unless the actual level of losses is lower than that sized by Standard & Poor's at the relevant point in time. In addition, step-downs of principal may not occur during the first 12 months of the transaction and subordination levels are required to have doubled.
• In certain circumstances CFAL may extend the term of secured loan contracts (which comprise 55.7% of the collateral pool), to bring a loan that is in arrears up to date without the need to collect any overdue payments. While contract extensions may result in delinquency data being understated at any given point in time, any impact on CFAL's historical gross loss data (reviewed as part of Standard & Poor's loss analysis), should be limited to the timing, rather than the quantum, of defaults. Adjustments to the quantum of defaults observed in the loss data to take account of the extension of contracts would not be made unless contracts that have already been extended are included in the closing collateral pool. The eligibility criteria include a requirement that contracts must not be more than 30 days in arrears at the cut-off date. This could include contracts that are classified as current because they have been extended, but which, absent the extension, may have remained in arrears for a period greater than 30 days or even defaulted. Such contracts may have a higher propensity to default compared to contracts that meet the eligibility criteria and have not been extended. However, extended secured loan contracts comprise less than 0.1% of all secured loan contracts in the collateral pool. Furthermore, in Standard & Poor's opinion, provided this proportion is below 2.5%, there would be negligible impact on our determination of minimum credit support for the transaction. The potential short-term liquidity stress created by the servicer extending contracts in the pool after the closing date has been incorporated into Standard & Poor's cash flow analysis.

CFAL was established in 1995 by Bank of Scotland and is a wholly owned subsidiary of Lloyds International, which in turn is a subsidiary of Lloyds Banking Group plc. CFAL is based in Bella Vista, New South Wales, and has more than 450 employees. CFAL offers a range of wholesale and retail financial products, including dealer floor plan, commercial loans, and equipment and motor vehicle finance. While CFAL is represented by sales and support staff in all Australian states and territories, its underwriting and servicing operations are centralized at head office.

All receivables in the collateral portfolio were originated through CFAL's Motor Finance division. The products included Consumer Credit Code-regulated secured loan contracts provided to individuals, and chattel mortgage and hire-purchase contracts provided to both businesses and individuals. All contracts in the pool are secured by either new- or used- passenger or light commercial vehicles.

More than 95% of CFAL's retail motor vehicle business is generated through its relationships with more than 260 dealerships. CFAL's marketing strategy focuses on dealership retention, through tailored marketing programs and the provision of a range of value-add services, such as training courses, to dealerships. All introducers, both external (dealers or brokers) and internal, utilize a point-of-sale system that enables them to quote, capture, and submit applications, receive an online response (either: approved including approval conditions, declined, or referred), and to produce contract documentation.

Applications are assessed via DecisionPoint, an automated approval system that incorporates CFAL's credit policy rules, servicing criteria, and auto-scoring based on two application scorecards--one covering individuals (both PAYE and self-employed) and the other covering companies and partnerships. Credit checks are undertaken for all borrowers. Applications that pass the credit score, meet serviceability criteria, and do not breach any credit policy rules are automatically approved by DecisionPoint. The remainder are either automatically declined, or referred to a credit sanctioner for a decision. Applications that are resubmitted by a dealer more than once are automatically referred to a credit sanctioner.

Delegated lending authorities and approval limits are assigned to individual underwriting staff based on experience, and range from A$50,000 for junior lenders to A$500,000 for senior lenders. Quarterly hindsight reviews of a sample of new business files are undertaken by CFAL's legal and compliance area. Any changes to credit policy or scorecards require review and approval by Lloyd International's risk-management committee.

CFAL is responsible for servicing the receivables. Its collections team is separated into two departments--front-end collections (FEC) and asset recovery. Telephone-collection activities for accounts that are less than 30 days in arrears are outsourced to National Credit Management Ltd. (NCML). Initial telephone contact with borrowers is made after a contract becomes 15 days in arrears, although system-generated letters are sent at days 7, 21, and 31. The actions taken and information recorded by NCML are logged in CFAL's systems to facilitate monitoring by FEC. Around 75% of contract payments are made by direct debit. Arrears greater than 30 days are prioritized by FEC based firstly on contract balance and then overdue status, with larger balance contracts assigned to senior collections staff. Contracts greater than 90 days in arrears or that are deemed to have defaulted earlier (for example, due to borrower bankruptcy) are transferred to asset recovery, which utilizes a network of licensed and CFAL-accredited mercantile agents for field calls, locating 'skips', and motor vehicle repossession. The average time from asset repossession to sale by auction is around two months.

In certain scenarios CFAL will permit secured loan contract borrowers who are in arrears to extend the term of their contract, which converts the account status from delinquent to current without the borrower actually making a payment. However, contracts will only qualify for extension if they meet the following requirements: (i) the loan settlement date was at least nine months prior; (ii) the borrower has shown a willingness to pay; (iii) in the last 60 days the borrower has made the payments scheduled over that 60 days; (iv) the contract balance is less than A$125,000; and (iv) the borrower must provide details of current income and expenditure and be assessed by CFAL as able to afford to make the contractual repayments.

While CFAL has no limit on the extension period, the average period of extensions granted has not exceeded 2.6 months in any given month, and has remained relatively stable over time. Contracts in the collateral pool will be subject to a maximum extension term of nine months.

CFAL's historical arrears performance is reflected in chart 1. CFAL's historical extensions data is presented in charts 2 and 3.

CFAL has advised that the decrease in arrears in September 2003 is a result of increasing the materiality threshold (the dollar level of arrears which must be exceeded before a contract is classified as delinquent) from A$50 to A$100. CFAL is not able to extract arrears data for December 2003 and December 2004 from its systems.

The structure of the transaction is shown in chart 4.

The pool contains 50,515 contracts comprised of secured loan, commercial hire-purchase, and chattel mortgage contracts. The receivables and associated rights will be equitably assigned to the issuer by CFAL. Title may be perfected if certain events occur, including: insolvency of CFAL; if CFAL is the servicer, failure of CFAL to pay any amount to the trustee when due; and an unremedied breach of seller representations that has or will have an adverse effect.

Standard & Poor's considers the principal rating-transition risk for this transaction to be a significant deterioration in the performance of the underlying receivables. Charts 5 and 6 illustrate the cumulative gross default and cumulative net loss experience of CFAL's secured loan, new vehicle portfolio. Charts 7 and 8 illustrate the cumulative gross default and cumulative net loss experience of CFAL's secured loan, used vehicle portfolio. Charts 9 and 10 illustrate the cumulative gross default and cumulative net loss experience of CFAL's term purchase, new vehicle portfolio. Charts 11 and 12 illustrate the cumulative gross default and cumulative net loss experience of CFAL's term purchase, used vehicle portfolio. Charts 13 and 14 illustrate the cumulative gross default and cumulative net loss experience of CFAL's chattel mortgage, new vehicle portfolio. Charts 15 and 16 illustrate the cumulative gross default and cumulative net loss experience of CFAL's chattel mortgage, used vehicle portfolio.

In relation to the partially amortized pools, Standard & Poor's has extrapolated the loss curves based on the historical loss performance of CFAL's fully amortized loss curves.

For the purposes of the loss analysis, the loss data was split between: secured loan new, secured loan used, term-purchase new, term-purchase used, chattel mortgage new, and chattel mortgage used. This enabled Standard & Poor's to look more closely at the trends over time, by asset type, and to derive individual gross default assumptions for each of the six contract classifications. A weighted average gross default percentage was then determined based on the actual proportions of the contract types included in the collateral pool.

As the loan pool amortizes, the credit support provided by the subordinated notes will increase relative to the senior notes. However, if the step-down test is met (which can occur 12 months after closing), principal will pass through to the class A, class B, and class C notes, on a pro-rata basis, which reduces the build-up of subordination for the class A and class B notes that would otherwise occur with a sequential pay structure. However, the subordination levels for the notes to be stepped down must remain at least double their original levels during the step-down period.

The risk of downgrades caused by downgrades to other supporting parties in the transaction is considered low. The interest-rate swap agreement contains downgrade language that provides for the posting of collateral or the replacement of the swap counterparty if the swap provider's rating falls below the required rating. In addition, all cash must be held in a deposit account maintained with a bank with the required rating or in appropriately rated investments.

Investors should note that the speed at which the collateral pool amortizes may be affected by a number of factors, and given the pass-through nature of the notes, the date on which the principal amount will be fully repaid will be determined by the prepayment speed of the pool if the notes are not called earlier.

Liquidity is provided by note over issuance. The liquidity reserve limit is 1.0% of the initial note balance, subject to a floor of A$500,000. In addition, principal collections may be applied to cover any timing mismatches between collections and interest owing on the notes. If a class of note has a charge-off allocated against it, it will lose its access to the liquidity reserve and principal draws, which could result in a failure to pay timely interest; however, Standard & Poor's cash flow analysis of the transaction, which incorporates rating assumptions and stresses commensurate with the respective ratings of each class of notes, indicates that interest will be paid in full on each interest payment date. If the servicer reserve account is established, this would provide a source of additional liquidity.

The entire pool comprises fixed-rate contracts. To hedge the mismatch between the fixed-rate asset cash flows and the floating-rate interest payable on the class A notes, the issuer will enter into a fixed-floating interest rate swap with Bank of Scotland PLC, Australia Branch (A+/Stable/A-1).

The collection account will be opened in the name of the trustee and must always be held with an eligible depository. CFAL will receive collections and must deposit them into the trust collections account within two business days of receipt in order to mitigate commingling risk, or within four business days while CFAL is owned by Bank of Scotland PLC if it is an eligible depository.

Although the scheduled maturity dates of contracts with balloon payments due at maturity are reasonably well-dispersed, Standard & Poor's undertook additional analysis by: (i) assuming that there are no defaults or prepayments, and therefore all balloon payments are received by the servicer on their scheduled maturity date; and (ii) using a one-week period as a stressed exposure proxy.

Based on this, Standard & Poor's determined that the maximum aggregate balloon payments could that could be received during any single week was between A$2.0 million and A$2.2 million for one week, and below A$2 million for all other weeks.

The approach taken by Standard & Poor's in assessing the credit risk in this transaction was based on an analysis of historical loss data provided by CFAL, dating from 2001. More specifically:

• Standard & Poor's reviewed CFAL's static loss data to determine base-case, gross default percentages for each of: secured loan new; secured loan used; term purchase new; term purchase used; chattel mortgage new; and chattel mortgage used. A weighted average base-case, gross default percentage or 'expected gross loss' for the collateral pool was then determined based on the proportions of the six contract classifications included. A stress multiple was applied to the expected gross loss at each given ratings category. The resulting number is used by Standard & Poor's as a proxy for sustainable gross defaults over the life of the transaction.
• The magnitude of the stress multiple applied depends on the rating level, whereby the higher rated notes are subject to a higher stress multiple in the analysis.
• Standard & Poor's reviewed CFAL's historical recovery data to determine a base-case recovery assumption for each of the six contract classifications. A weighted average expected recovery assumption was then determined based on the proportions of the six contract classifications included in the collateral pool. The credit given to recovery at each given ratings category is a percentage of base-case expected recoveries. The magnitude of the credit given depends on the rating level, with lower credit given at higher rating levels.
• Notwithstanding the quantitative analysis, Standard & Poor's qualitative judgment will also have a bearing on the minimum levels of credit and liquidity support at each rating category. Our qualitative view is based on a number of factors, including our industry knowledge in local and offshore markets, concentration, event, industry, and economic risk that may impact on the performance of the assets in a changing environment.

Based on the above, our net loss expectation (also commonly referred to as "base-case loss level") for the underlying pool is 2.35%. The net loss expectation reflects our opinion of the combination of the expected gross loss on the underlying pool of 3.71%, and the expected recoveries of 36.8% from sales of the motor vehicles upon a default.

Table 2 shows a summary of the credit assessment.

Table 2 Summary Credit Assessment
	AAA	A	BBB	BB	B
Stress multiple used (x)	5.0	3.0	2.0	1.6	1.3
Default frequency (%)	18.6	11.1	7.4	5.9	4.8
Loss severity (%)	81.6	75.4	72.4	72.4	72.4
Minimum credit support after credit to recovery (%)	15.2	8.4	5.4	4.3	3.5
Credit to excess spread (%)	0.0	0.0	0.0	0.0	0.0
Note: Default frequency equals base-case gross default multiplied by the relevant stress multiple. Loss severity equals net loss divided by gross default, where net loss is gross default less credit to recovery.

The capacity of the transaction's cash flow to support the rated notes was analyzed by running several different scenarios at each rating category. Our cash flow analysis encompassed the following factors:

• Level of gross defaults and recoveries commensurate with each rating level;
• Weighted average recovery period (assumed to be 12 months);
• Prepayment rates. Two different prepayment curves were modeled including a low conditional prepayment rate (CPR) of 2% p.a. and a high CPR of 25% p.a.;
• Timing of defaults. Three different loss curves were modeled including a front loaded, back loaded, and normal default curve;
• Replacement servicer fee of 0.75% p.a. and extraordinary expenses of 0.25% p.a.; and
• Compression in net asset margin. Under the terms of the swap, the trust pays a fixed rate of interest and in turn, receives a flat one-month BBSW. If higher yielding contracts default and prepay disproportionately to the lower yielding contracts, the net margin received by the issuer would be expected to reduce over time.

The cash flow analysis allows Standard & Poor's to assess the sufficiency of the liquidity and yield support for the transaction and to measure the ability of the cash flows to build and retain spread over time.

We also cash flow modeled two additional scenarios to determine how vulnerable the notes would be to a downgrade under either scenario:

• Scenario 1: Base-case gross losses are 1.25x higher than our expected level of 3.71%.
• Scenario 2: Base recoveries are only 75% of our expected base recovery rate of 36.76%.

The minimum credit support under each scenario is set out in table 3.

Table 3 Minimum Credit Support After Credit To Recovery
	AAA	A	BBB	BB	B
Expected	15.2	8.4	5.4	4.3	3.5
Scenario 1	19.0	10.5	6.8	5.4	4.4
Scenario 2	16.0	9.1	5.9	4.7	3.9

The cash flow analysis results showed that each classe of notes is sufficiently enhanced (through hard credit support) to withstand stresses commensurate with its original rating under both Scenario 1 and Scenario 2.

Table 4 sets out what the rating level of each class of notes would be at transaction close under each scenario.

Table 4 Rating Transition
Scenario	Class A-2 Notes	Class B Notes	Class C Notes	Class D Notes	Class E Notes
Expected	AAA	A	BBB	BB	B
Scenario 1	AAA	A	BBB	BB	B
Scenario 2	AAA	A	BBB	BB	B

The total receivables pool for Bella Trust Series 2009-1 as of Nov. 12, 2009 is summarized in tables 5 and 6.

Table 5 Summary Characteristics
Total no. of contracts	50,515
Total value of contracts (A$)	857,953,484
Max. contract size (A$)	96,742
Avg. current contract size (A$)	16,984
Weighted avg. interest rate (%)	10.5
Weighted avg. contract seasoning (mos.)	23.1
Weighted avg. remaining term to maturity (mos.)	34.4

Table 6 Pool Characteristics
Finance Type
Secured Loan �?? New	27.3
Secured Loan �?? Used	28.5
Term Purchase �?? New	14.6
Term Purchase �?? Used	10.3
Chattel mortgage �?? New	14.0
Chattel mortgage �?? Used	5.4
Geographic Distribution
New South Wales	34.0
Victoria	21.5
Queensland	17.0
Western Australia	20.7
Australian Capital Territory	0.7
South Australia	4.9
Tasmania	0.1
Northern Territory	1.1
Seasoning
Less than or equal to six mos.	7.3
Six mos. to one yr.	18.6
One to two yrs.	30.6
Two to three yrs.	27.4
Three to four yrs	12.5
Four to five yrs	3.8
Greater than five yrs	0.0
Remaining Term to Maturity
Less than or equal to one yr.	7.1
One to two yrs.	17.1
Two to three yrs.	29.9
Three to four yrs.	26.9
Four to five yrs	19.1
Balloon Payment
No balloon	59.7
1-10%	0.4
11-20%	3.2
21-30%	15.9
31-40%	15.1
41-50%	5.1
50-55%	0.6
Over 55%	0.0
New/ Used
New	55.8
Used	44.2

Primary analyst: Elizabeth Steenson, director, Melbourne, (61) 3 9631 2162

ABS analytical manager: Luke Elder, director, Melbourne, (61) 3 9631 2168

Surveillance manager: Erin Kitson, associate, Melbourne, (61) 3 9631 2166

Surveillance analyst: Alisha Treacy, ratings specialist, Melbourne, (61) 3 9631 2182

• Australian & New Zealand ABS Quarterly Performance Watch, published quarterly.
• Australian Securitization News, published weekly.
• Standard & Poor�??s To Explicitly Recognize Credit Stability As An Important Rating Factor, published Oct. 15, 2008
• Principles-Based Rating Methodology For Global Structured Finance Securities, published May 29, 2007
• Auto Loan Criteria: The Rating Process For Auto Loan-Backed Transactions, published Sept. 1, 2004
• Auto Loan Criteria: Credit Analysis For Auto Loan-Backed Transactions, published Sept. 1, 2004
• Auto Loan Criteria: Structural Analysis For Auto Loan-Backed Transactions, published Sept. 1, 2004
• Auto Loan Criteria: Legal Considerations In Rating Auto Loan-Backed Transactions, published Sept. 1, 2004

These articles are available on RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. They can also be found on Standard & Poor's Web site at www.standardandpoors.com.