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It's All Go, as Always, in Australia

Australian bank, St George Bank, which last month carried out its first-ever auto loan securitization, has entered the global markets for the first time with a US$994 million mortgage-backed bond issue.

The deal will almost double in Australian dollar terms the volume of home loans that the bank the country's fifth largest has so far securitized, from A$1.8 billion to A$3.3 billion (US$1.18-2.16 billion). At presstime, bank executives were discussing pricing with U.S. investors. Although a deal appeared imminent, bank officials warned that it would be delayed if market conditions deteriorated.

The deal, led by Credit Suisse First Boston, consists of three senior tranches: US$300 million of Class A1 notes with a 0.7 year weighted average life; US$569 million of Class A2 notes (3.5 years) and US$125 million of A3 notes (7 years). The A3 tranche is believed to have been designed with European investors' needs in mind.

The senior deck has been provisionally rated triple-A by Moody's, while Standard & Poor's and Fitch IBCA are expected to assign similar ratings. The deal also includes an A$4 million subordinated tranche, which will be issued domestically. J.P. Morgan and Deutsche Bank are co-leads.

Citibank steers by compass

Citibank has launched the fourth leg of its Compass program, which securitizes Australian home equity loans. Series 1999-4 is identical in size and maturity to its predecessors, consisting of A$100 million of senior bonds (rated AAA/Aaa by Standard & Poor's and Moody's) and A$4 million of subordinated notes (A/A2), with both tranches over five years.

The deal is the first under the master trust structure to be fixed rate and to be eligible for interest withholding tax exemptions, enabling the bonds to be sold offshore in the secondary market without fear of liability to the 10% tax. Lead manager Salomon Smith Barney and manager Credit Suisse First Boston were due to price the transaction at presstime.

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