ANZ Banking Group and Bendigo Bank illustrated the continued strong demand in the domestic mortgage-backed securiites market when they priced a total A$900 million MBS at the tighter end of expectations.
ANZ, one of the country's four major banks, priced the second issue from its Kingfisher Securitisation vehicle. Series 2001-1D consisted of A$500 million of floating- rate notes in three sequential tranches. The A$280 million of Class A1 senior notes had a weighted average life of 1.44 years and priced at 23 basis points over the bank bill swap rate, while the A$210 million of Class A2 senior notes, which had a WAL of 5.27 years, priced at 36 basis points over BBSW. Neither the WAL nor the pricing for the A$10 million Class B subordinated tranche was disclosed..
The notes were callable at the earlier of seven years from settlement or when they represented 10% of the initial invested amount. Standard & Poor's rated the senior tranches AAA and the subordinated paper AA-. ANZ Investment Bank was lead manager, with Deutsche Bank and Macquarie Bank as co-leads.
Banksia Bendigo Bank, a regional bank based in Victoria, claimed that the pricing it achieved on a A$400 million issue through its Banksia Trust program compared favorably with ANZ's Kingfisher transaction.
According to Bendigo, it achieved a weighted average margin over time of 33.3 basis points over swap on a weighted average life of 4.8 years, compared to the WAMOT of 33.1 basis points achieved a few days earlier by ANZ over a shorter WAL of 3.2 years.
The Banksia Trust Series 2001-1 transaction consisted of a soft bullet A$216 million A1 fixed-rate tranche maturing March 15, 2004, and marketed at between 28 and 31 basis points over the three-year swap rate; a A$174 million A2 floating-rate tranche priced with an expected life of 6.5 years, marketed at between 39 and 41 basis points over the quarterly bank bill swap rate; and a subordinated A$10 million Class B floating rate tranche.
The senior tranches were rated AAA by Standard & Poor's, which rated the subordinated notes AA-. Both senior tranches were priced at the lower end of their respected marketed ranges, while the subordinated paper was priced at 55 basis points over BBSW.
Deutsche Bank was lead manager, with Westpac Banking Corp and Commonwealth Bank of Australia co-managers. The structure of the transaction - notably the 2.5% subordination - bore some resemblance to deals Deutsche had also arranged for PUMA (Macquarie Bank's flagship securitisation vehicle) and RAMS Mortgage Corp.