CNH - the entity formed by the 1999 merger between U.S.-based Case Corp. and Europe's New Holland BV - is to make its debut in the Australian asset-backed market with a A$450 million deal led by SG Australia.

NH Capital Australia has completed the sale of a portfolio of financing arrangements for agricultural and construction machinery, which will be financed initially through the issue of seven-year notes to two conduits - SG's ACE program and Citibank's CRS facility.

The split between the two conduits will be roughly equal, said sources close to the deal, while a proportion of the deal will be put back to the asset originator in the form of a seller-note to help underwrite the structure's AAA' rating from Standard & Poor's.

The deal will be refinanced with a public term debt issue some time next year, the exact date to be at CNH's discretion. The transaction is the first equipment receivables securitization backed by agricultural and construction equipment in Australia. The financing arrangements include loans, finance leases and hire purchase agreements.

SMHL Global

The steady build-up of Australian issuance into the global mortgage-backed securities market has continued with a $582 million deal by non-bank financier, Members' Equity.

The deal, designated SMHL Global Fund No. 2, was the company's second into the market and consisted of $220 million of Class A-1 notes and $362 million Class A-2 notes, both rated triple-A by Standard & Poor's, Moody's Investors Service and Fitch.

The deal, which had a weighted average life of 4.5 years, priced at a weighted average cost of 20.7 basis points over Libor. A source at Members' Equity, which provides financial services to members of union-sponsored superannuation funds, said the all-up cost of the transaction was between three and four basis points lower than that of the company's first global MBS, which took place a year ago.

The lead manager on both occasions was Credit Suisse First Boston. UBS and Deutsche Bank were co-leads on the more recent deal. The deal also included A$17.1 million of domestically-issued subordinated notes, rated AA by S&P and Fitch and Aa2 by Moody's. Pricing for the subordinated tranche was not disclosed.

Mirvac sells A$500m CMBS

Listed property trust Mirvac Group has completed the country's biggest commercial mortgage-backed securitization to date with a A$500 million deal led by ANZ Investment Bank and Westpac Institutional Bank.

The transaction consisted of $350 million of floating rate paper and A$150 million of fixed rate bonds, both with a five-year soft bullet and 18-month tail. The FRNs were priced at a coupon of 41 basis points above the three-month bank bill swap rate while the bonds, sold at 99.916 with a coupon of 6.5%, yielded 6.52% or 82 basis points above the February 2006 Commonwealth Government bond and 41 basis points above swap.

The deal, on which Merrill Lynch International (Australia) Ltd was co-manager, emulated the structure of a A$150 million transaction last year by Macquarie Office Trust, the first CMBS by a listed trust and regarded as the most successful deal of its kind in 2000. Both transactions pay interest-only for the first five-years.

If the issuer is unable to repay principal after that time, it has 18 months in which to refinance or liquidate its portfolio without triggering an event of default. Both deals were rated AAA by Standard & Poor's. According to Westpac, the Mirvac offer was "substantially over-subscribed" and widely distributed domestically and offshore.

Non-conformers buoyant

Australia's fledgling market for mortgage-backed securities backed by non-conforming home loans has won further support from Standard & Poor's, which said the sector had performed "exceptionally well."

The ratings agency upgraded tranche 3 bonds issued by the JEMstone Fund - the market's longest-established non-conforming issue - from A- to AA-. It also upgraded Housing Loan Corp's Series 1999-1 HLC Trust class B paper from BBB to A+.

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