Aussie mortgage specialist Homeloans Ltd. last week completed its first RMBS since December 2003, with an A$460 million ($351.2 million) offering. Westpac Institutional Bank acted as sole lead for the deal, issued via the Residential Mortgage Trust facility.

The deal is backed by 2,229 loans; 32% of which are low-documentation mortgages. Mortgage cover comes through Genworth and PMI.

The A$438.8 million senior notes - rated AAA' by Standard & Poor's - priced at 18 basis points over the bank bills swap rate (BBSW) for a 2.2-year average life, while the A$21.2 million sub-piece - rated AA' - offered a 26 point spread for a five-year average life.

Those spreads were well outside those recorded by rival originator, Member's Equity, on its recent A$1 billion prime outing via the SMHL program. Member's Equity's deal ended 14 basis points over BBSW for the 2.85-year senior notes and 18 basis points for the double-A rate sub-notes.

Market watchers say spreads were always likely to finish outside Member's Equity - a more established RMBS issuer. However, they suggested the high proportion of low-doc mortgages included in an otherwise prime RMBS might have pushed spreads out by one or two basis points.

Most arrangers now believe issuers can achieve better pricing by doing 100% prime or 100% low doc issues, but will likely pay a premium if they do split deals. Indeed, the pricing of Macquarie Securitisation's latest RMBS, a 100% low-doc deal sold through its PUMA program, seems to back up this theory.

Priced a couple of days after Homeloans, Macquarie's A$1 billion offering - upsized from A$750 million - was led by Macquarie Bank and Deutsche Bank.

The A$960 million senior notes, rated triple-A by Moody's and S&P, priced at 19 over the BBSW for a 2.6-year average life. The A$40 million sub-tranche, rated Aa2/AA, closed 24 points over BBSW for 4.9-years.

The all-in cost of 19.4 basis points is reckoned to be the tightest yet for a low-doc deal. Nineteen accounts participated, with 46% of the notes selling to domestic investors, 36% to Europe and 18% placing with Asian buyers.

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

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