Kingfisher ANZ Banking Group - one of Australia's "big four" banks - became the second of the country's banks this year to make its debut in the global mortgage-backed securities, the first having been National Australia Bank.
ANZ came to market with a $1 billion deal led by Salomon Smith Barney. The transaction, through the Kingfisher 2001-1G vehicle, consisted of Class-A notes rated triple-A by Standard & Poor's, Moody's Investors Service and Fitch, with a weighted average life of 3.21 years and paying a coupon of 18 basis points over three-month Libor.
The deal was supported by a A$41.5 million issue of Class B notes rated AA- by both S&P and Fitch. The pricing of the domestic subordinated tranche was not disclosed.
Group treasurer, Rick Sawers, said the bank planned to be "regular visitors" to the global markets. ANZ, Deutsche Bank, Merrill Lynch and Morgan Stanley were co-managers.
In January NAB, Australia's biggest bank, launched its first global mortgage-backed deal. The transaction, through The Homeside Mortgage Securities program, consisted of $1.059 billion of senior Class A notes sold into the U.S., Europe and Asia and a A$20 million subordinated Class B domestic tranche.
The pricing - 19 basis points over three month Libor for the Class A notes, and 52 basis points over the bank bill swap rate for the Class B notes - set a new benchmark for Australian issuers.
Mirvac
Listed property group Mirvac has begun roadshowing its planned A$500 million issue - the biggest commercial mortgage-backed deal to date in Australia - with a view to launching and pricing by the end of May/early June. ANZ Investment Bank and Westpac Instutional Bank are joint lead managers, with Merrill Lynch as co-manager.
Details will be finalized after investor presentations. The basic outline, however, is for a five-year soft-bullet maturity with a final maturity 18 months later. If principal is not repaid by the end of the soft-bullet period, Mirvac has 18 months in which to refinance or liquidate its portfolio - a breathing space that, under the terms of the AAA rating assigned by Standard & Poor's, does not constitute an event of default.
The structure replicates that of last year's A$224 million deal for Macquarie Office Trust - the country's first CMBS by a listed property trust. The MOT deal, also led by Westpac, was regarded as the most successful CMBS of 2000.
PMI
The Australian subsidiary of U.S.-based mortgage insurer PMI has won its spurs from Standard & Poor's, which has upgraded the company from AA- to AA. PMI entered the Australian market through its acquisition of MGICA during the late 1990s.
Rating agencies, particularly Moody's Investors Service, are wary of the Australian mortgage insurance sector, which is overcrowded and highly competitive. Moody's is on record as saying it favours the local operations of GE and PMI, because of the strong support from their respective parents. In PMI's case, this perceived advantage is now beginning to yield benefits: the company is virtually the only one of its kind to be enjoying upgrades.
In February last year, Fitch assigned a first-time public rating of AA. Now that S&P has caught up with Fitch, attention is focused on Moody's, which rates the company two notches lower at A1 but which, last October, raised its ratings outlook from stable to positive.
PMI managing director Ian Graham expects Moody's to raise its rating by one notch some time in the next 12 months. S&P's action, meanwhile, led to parallel upgrades from AA- to AA of 17 tranches ofinternational and domestic subordinated Australian MBS totalling A$241.7 million.
The tranches, all Class B notes or bonds unless otherwise stated, were:
*Crusade Global Trust No. 1 of 2001 (A$35.2 million)
*Progress 1997-1 Trust (A$15 million)
*Series 2000-2G Medallion Trust (A$27 million)
*Series 2001-1G (A$39 million)
*Series 1998-1 Reds Trust (A$10.6 million)
*Series 1999-1 Reds Trust (A$4.4 million)
*Series 2000-1 Reds Trust (A$3.7 million)
*Series 2000-2 Reds Trust (A$5.2 million)
*Series 2000-1 Reds Trust (A$5 million)
*ARMS II Fund I (A$6 million tranche 3 bonds)
*ARMS II Fund II (A$15 million tranche 2 bonds)
*RMT Securitisation Trust No. 1 (A$13 million)
*RMT Securitisation Trust No. 2 (A$12 million)
*RMT Securitisation Trust No. 3 (A$3 million)
*RMT Securitisation Trust No. 4 (A$6 million)
*Series 1999-1E CATS Trust (A$12.2 million)
*Series 2000-1E Swan Trust (A$29.4 million)
