PUMA Finance, Australia's biggest non-bank home loan securitizer, brought the biggest deal in the domestic market for at least two years when it launched a A$700 million (US$443 million) transaction.

The vehicle - which is managed by Macquarie Bank subsidiary, Macquarie Securitisation - structured the PUMA Masterfund P-7 offer in three tranches: Tranche 1-F, A$420 million of senior fixed rate debt with a call option exercisable in February 2003; Tranche 2, A$256 million of senior floating rate notes with a weighted average life of 6.9 years; and Tranche 3, A$24 million of subordinated floating rate debt with a 7.5 year WAL.

Pricing was set for February 14.

The borrower's last domestic deal was in June 1997, when it raised A$500 million through its Masterfund P-6. Since then PUMA, like other major Australian mortgage-backed issuers, has focused on deeper and more liquid Euromarkets, issuing the equivalent of A$5 billion.

Macquarie Securitisation managing director, Tony Gill, said the deal replaced MBS recently removed from the market as a result of the exercise of fixed rate call options.

Last month, Macquarie Securitisation brought the year's first deal in the domestic market with a A$148 million refinancing of mortgages from an A$800 million pool securitized by the PUMA P-5 Master Fund in 1996.

The original deal had been subject to a step-up and call option, which Macquarie had exercised. That deal priced at 20 basis points over the bank bill swap rate, between 3 and 5 basis points better than expectations.

On the same day as the PUMA P-7 announcement, Macquarie Bank's long term deposits rating was raised from A3 to A2 by Moody's Investors Service, which also upgraded the investment bank's short-term rating from Prime-1 to Prime-2.

This led to an upgrading of the short- term rating of asset backed CP issued by Structured Prime Asset Receivables No. 2, a Cayman Islands special purpose company, to which Macquarie supplies liquidity and swap facilities.

Meanwhile, Australian Mortgage Securities, a subsidiary of ABN AMRO, priced A$300 million of MBS consisting of A$150 million of AAA-rated senior debt with a two-year average life and A$139.5 million of senior debt, also rated AAA, with an average life of four years.

The tranches, issued through ARMS II Fund VI, were priced at 35 and 45 basis points over the 30-day bank bill swap rate respectively. Pricing for a A$10.5 million subordinated tranche, rated AA by Standard & Poor's, was kept confidential but was understood to have been 75 basis points.

The senior debt pricing was said to have been at the top of the marketed range, while the subordinated pricing was said to have been aggressive.

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