Net interest margin (NIM) mortgage securitizations may be commonplace in the U.S., and are even considered a driving force in the home equity sector's boom in recent years, but other markets have been slow to catch on. Given how Australia has the second biggest RMBS market behind the U.S., it is perhaps surprising that NIM issues haven't grown on the radar Down Under at a similar pace.

Last week, Interstar Millenium, the monoline mortgage spinoff of financial services company Challenger Financial, completed its first NIM offering, two years after the only other term effort seen in the domestic capital markets since 2002. Although other monoline originators, such as Australian Mortgage Securities (AMS) and RAMS Home Loans, have completed private and conduit placements in the past 12 months, InterStar's A$180 million ($128.7 million) transaction is the first public NIM issue since AMS issued a A$95 million deal in 2002.

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