The Australian government will extend the Australian Office of Financial Management (AOFM)s RMBS purchase program. It could now reach AUD 8 billion ($7.25 billion) -- twice the original program - as the government wants to continue to back up a number of second tier mortgage lenders.

While the existing program directly purchases senior tranches from eligible structures, the extended program could provide investors with a liquidity backstop facility for the new eligible transactions.

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