ABN Amro recently launched Australia's first securitization backed by operating cash flows from nursing homes.
The A$128 million (US$81.5 million) transaction consists of A$93.6 million fixed-rate senior annuity bonds and A$34.3 million fixed-rate subordinated bonds, both with maturities of October 12, 2027, and rated double-A and triple-B-plus respectively by Standard & Poor's.
The underlying assets include 40 nursing homes and eight assisted-living apartment complexes in New South Wales, Victoria and Western Australia, which are operated by Moran Health Care (Australia) and managed by Omega (Australia). Few details were know as ASRI went to press, but S&P said the transaction represented "a significant development for both the Australian property securitization industry and aged care sector."
Meanwhile, Tasmania's Trust Bank made its debut in the mortgage-backed market with a A$220 million deal led by Deutsche Bank. The Goldstar Trust No. 1 senior pass-through floating rate notes had an expected average life of 3.5 years and were priced at 45 basis points over the 30-day bank bill swap rate. The deal, which was rated triple-A by S&P, was oversubscribed and increased to A$250 million.
The lack of a subordinated tranche to provide credit enhancement was unusual: investors took comfort instead in the primary mortgage insurance and pool policies provided by Housing Loan Insurance Corp.