ABN Amro is in the market with a AUD150 million domestic commercial MBS issue that securitizes the rental returns of Aurora Place - the commercial building in Sydney occupied by the Dutch bank.
The bonds, which are being issued by Commercial Property Investment Trust (CPIT), have been assigned a provisional Moody's rating of Aaa.
According to an ABN official, this rating is achieved by mortgage insurance and, in particular, an extraordinarily low loan to value ratio (LVR) of around 30%. In most MBS issues - both commercial and residential - tranching is used to enhance the credit of the senior bonds.
This CPIT deal, however, comprises only one class of notes. With a soft bullet structure typical of Australian securitizations, the bonds are being offered in the range of 38bp-45bp over BBSW for a scheduled maturity of June 30, 2006 and a final legal maturity of September 30, 2007. The deal was launched on March 29 and is due to be priced on April 9.