The structured finance market has produced Australia's longest-dated non-government bond - a 20-year instrument which has been incorporated into the key UBS Warburg Australia corporate and composite bond indices and which, according to the banks supporting the transaction, could change investor habits in the wider market, encouraging them to lengthen the duration of their corporate credit portfolios.

The bond comprises one of three tranches on a A$687 million (US$393 million) issue for the Victorian Rail Trust Entity (Virtue Trust), a special purpose vehicle financing new rolling stock for National Express Group (Australia) Pty Ltd., a privately-owned rail and tram operator in and around Melbourne, Victoria. One of the deal's unusual features is its lack of core credit enhancements: the AAA ratings (from Standard & Poor's) are supported by recourse to the state government of Victoria.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.