Total securitization issuance in Australia for the second quarter has already topped A$20 billion ($14.8 billion) - the single biggest quarter on record. With an estimated A$4.6 billion to be settled before the end of June, the record will be pushed even further. And as most deals this year have been upsized due to investor demand, issuance could even reach A$25 billion.

Not surprisingly, RMBS continues to dominate. Quarterly RMBS volumes have so far reached A$18.2 billion, itself a record for the asset class. Four transactions - by St. George Bank, Adelaide Bank, Heritage Building Society and Bluestone Group - either closed or were due to price as of press time.

St. George Bank tapped the market for the second time in 2006, with its A$1.7 billion-equivalent dual currency prime RMBS. The transaction - issued via the Crusade Trust and led by St. George and Barclays Capital - is backed by 9,364 loans worth A$2 billion. The pool has a weighted LTV of 65.6% and seasoning of 17.3 months. St. George Insurance and PMI predominantly provide the mortgage cover.

Pricing for the 400 million ($507.1 million) euro notes - rated triple-A by all three international agencies - finished at the tight end of the marketed range, offering nine basis points over Euribor for a 2.89-year average life. The euro tranche on St. George's global deal in February came at eight basis points (ASR, 02/27/06).

The A$975 million senior domestic tranche - also rated triple-A - priced at 14 basis points over the Bank Bills Swap Rate (BBSW), which is probably about par given the number of competing deals in the market.

In addition, the transaction features two sub pieces, including A$28.6 million of double-A notes with a 4.9-year average life and A$13 million of A+ bonds with a 4.79 year life. Pricing was not available for these tranches.

Adelaide Bank, meanwhile, has launched an A$1 billion nonconforming RMBS through its Q-Trust. National Bank of Australia is sole lead on the deal, backed by a pool of 4,213 loans with an LTV of 71.77% and seasoning of 11.5 months.

The initial pool is worth A$876.3 million, which will be topped up over the next three months. The loans were actually originated by GE Mortgage Solutions. However, as Adelaide Bank purchased GE's loan book and acts as servicer, it owns the rights to residual income earned by the trust.

It is the second time Adelaide Bank and GE have put together a subprime deal; with the previous offering completed last December.

The latest transaction features two senior tranches - rated triple-A by Moody's Investors Service and Standard & Poor's - totaling A$864 million. The A1 A$504 million super senior notes are expected to finish 18 or 19 points over BBSW for 1.02-years. The 2.7-year A2 tranche will be placed privately.

Five subordinated tranches with ratings ranging from double-A minus to single-B will also be offered to investors.

Heritage was due to price an A$750 million prime RMBS via its HBS Trust facility. Societe Generale arranged the transaction, and will jointly lead the underwriting effort with Westpac Banking Corp. Roadshows have been held in major Australian and Asian cities.

The underlying pool - roughly equal to the amount of rated notes - has an LTV of 66.1% and seasoning of 18.2 months. PMI provides mortgage insurance, and there are no low-documentation mortgages in the transaction.

Price guidance for the A$731 million senior piece - rated triple-A by Moody's and S&P - is 15 to16 basis points over BBSW for 2.5 years. The 4.7-year Aa2/AA subordinated tranche is expected to offer a 20 point pickup.

The fourth RMBS in the pipeline is Bluestone's A$604.6 million non-conforming issue led jointly by Barclays and Westpac. Sold via the borrower's Sapphire program, the underlying pool has an LTV of 74.67% and seasoning of 6.93 months.

Bluestone will sell three triple-A tranches - as rated by Fitch Ratings and S&P - including $431.75 million of super senior bonds, which are being marketed at 20 over BBSW for 2.1 years. The other two senior tranches are expected to price in the mid-late 20's spread range.

In addition, the transaction features five subordinated tranches with ratings ranging from double-A to single-B.

Meanwhile, Bank of Queensland proved there is more to the market than RMBS with the completion of an A$630 million auto and equipment loans ABS. Macquarie Bank was lead manager with ABN Amro a co-lead on the eight tranche issue, sold through the bank's REDS facility.

The deal was backed by 11,467 contracts with an outstanding principal of A$629.8 million. Transport loans make up 49% of the pool, which has average seasoning of eight months.

The deal featured A$130 million of 0.38-year money market notes - rated A-1+ by S&P - which ended seven points over BBSW. The A$437 million triple-A senior piece priced at 17 basis points over BBSW for 2.1-years.

The result compared favorably to Bank of Queensland's most recent offering in June 2005. The triple-A piece on that transaction priced at 21 basis points for 2.46 years.

Additionally, the latest transaction featured four publicly offered subordinated tranches. Spreads ranged from 34 points on the single-A notes to 222 points for the double-B minus notes. Three unrated tranches were privately placed.

Market sources said the deal was oversubscribed with 20 accounts participating. Approximately 20% of the notes placed among Asian and European investors.

The final news from Down Under again concerns Adelaide Bank. The bank's investment subsidiary, Adelaide Managed Funds (AMF), will in July list a new product on the Australian Stock Exchange that will invest purely in asset-backed deals.

AMF will specifically target retail buyers to participate in its Asset-Backed Yield Trust. Somewhat surprisingly given the rapid advance of the Aussie ABS market, retail investors have thus far been an untapped resource. The fund hopes to raise A$300 million pre- and post- listing to purchase securities.

According to sources, AMF - which already manages A$1 billion in ABS sold to institutional buyers - will invest in some ABS paper currently held by Adelaide Bank, giving its parent capital relief.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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