Recently National Australia Bank (NAB) had priced a $1 billion RMBS for Member Equity Bank that was sold to global investors, which include money market investors, and domestic buysiders.
A media release from the bank explained that the securitization offered different securities in various currencies. The deal was split in a way that offered a U.S. dollar tranche catering to U.S. money market investors, a tranche tailored for fixed-rate buyers as well as more traditional tranches for domestic buysiders.
Rick Taiano, a director at NAB, said that this deal is a sign that more offerings like this will be coming to market in the future. He added that many investors have been waiting on the sidelines, which led to appetite for the deal.
"It is important to see that we were able to structure the transaction and get it distributed, which is encouraging," he said.
Investor comfort came from the quality of the collateral. Taiano said that the Australian mortgage market works a lot differently compared to the U.S. In Australia, there are tighter origination standards. Additionally, since Australian RMBS are a different type of collateral, they serve as a source of diversification for U.S. securitization investors.
There has also been a change of heart in terms of the U.S. buyer base. "Different investors have turned the corner in what their appetite is and in their due diligence," Taiano said. "They also have a lot of cash they need to put to work."