Activity by Australian structured finance issuers surged by nearly 47% during the first half of the year, from A$4.9 billion in the first half of 1998 to A$7.2 billion, according to Moody's and Standard & Poor's.

Among the key trends were a continued diversification into offshore markets and, for the first time, a significant contribution to growth by securities backed by non-mortgage assets.

The asset-backed commercial paper market retreated, however, and S&P noted a sharp (28.6%) decline in the dollar value of all programs rated, mainly thanks to the fall in ABCP issuance.

"Market participants can expect more of the same throughout the second half of 1999 as offshore issuance is likely to expand and new assets are securitized," said S&P. The agency added that it expected a slowing of activity in the fourth quarter as the market focused increasingly on the Y2K problem.

Roger Hogan

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