Issuance in the domestic Australian market has slowed down considerably in recent weeks, though the industry continues to break new ground in various other ways. Independent mortgage financier Interstar, for example, has opened an intriguing vista for the local securitization industry by becoming the first issuer to list mortgage-backed securities on the Australian Stock Exchange.

This is a significant move for two reasons. Traditionally, Australian MBS issuers - including Interstar - have listed their domestically-issued securities in such eurobond centres as London and Luxembourg. By doing this, the securities become eligible for exemption from the 10% interest withholding tax (IWT) levied by the Australian government on non-resident holders of domestic Australian dollar bonds. Listing also conferred the usual benefits of liquidity and greater market transparency.

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