AMP Bank, owned by the country's largest funds-management group, has entered the securitization market for the first time with a A$1.3 billion issue of mortgage-backed securities.
The securities were sold into a warehousing facility, Progress Warehouse Trust No. 1, which is managed by SG Australia. Few details of the MBS were revealed, other than that they consisted of three senior tranches rated AAA by Standard & Poor's and a single tranche of AA- subordinated debt.
The transaction was financed by the issue of commercial paper by SG's HOMES conduit, the proceeds of which were loaned to Progress. The arrangement will be refinanced on an opportunistic basis in the global capital markets.
The size of the deal was not far short of the record A$1.45 billion MBS by RAMS Home Loans in late November, and counts as the second-biggest non-government bond issue yet in Australia. Progress is a revolving facility with a ceiling of A$1.5 billion.
A divine private MBS
Queensland residential property developer Devine has made its debut in the securitization market with a A$50 million deal through its First Permanent Home Loans originations arm. The deal takes to four the number of non-conforming home-loan securitizations in the Australian market.
Many of the underlying borrowers are first-time homebuyers and all the loans have loan-to-valuation ratios of 100%. None is supported by lenders' mortgage insurance; instead, borrowers contribute to a mutual discretionary fund (effectively an insurance pool) equivalent to 1.5% of the outstanding debt.
First Permanent Securities Mortgage Trust 2001-1 is made up of A$36 million of AAA-rated paper, A$9 million BBB+ paper and two unrated tranches of A$4 million and A$1 million. The credit support provided in respect of the two rated tranches is 29.5% and 11.1%, respectively. The deal was structured and arranged by Basis Capital and privately placed through sole lead, ANZ Investment Bank.
Interstar Securities has set up what it claims to be Australia's first independently held asset-backed conduit debt issuance program, called, somewhat inevitably, Starship Finance (A) Pty Ltd.
The initial assets of Starship CP Series No.1 are A$300 million of mortgage-backed securities issued under the Interstar Millennium Series 2001-3 Trust. The securities are expected to be issued in two tranches with 93% expected to be rated AAA and the balance AA- by Standard and Poor's. Interstar expects the size of the program to reach around A$3 billion.
National Australia Bank Limited is the arranger and lead manager of the CP issue under the first series, after which dealers will include NAB, Commonwealth Bank of Australia Limited, Deutsche Bank and SG Australia. Zurich Capital Markets Australia is expected to arrange any future medium-term notes to be issued under the program.