Member's Equity has launched its second global rule 144A residential mortgage-backed security issue, SMHL Global Fund No2. The issue is also Members' eleventh securitization issue, and its public issuance now totals A$4 billion. Credit Suisse First Boston (CSFB) arranged and lead managed the deal, with Deutsche Banc Alex. Brown and UBS Warburg as co-managers.

The notes are secured on 9, 924 mortgages worth A$1.1 billion, with a weighted average loan-to-value ratio of 68.6%. Standard & Poor's listed this as a deal strength in view of the low weighted average seasoning of 6.8 months. All mortgage borrowers are qualified at an interest rate 2% higher than the prevailing standard variable rate.

Class A-1 was $220 million and priced three-month Libor + 9 basis points, with an average life of one year and a final maturity on June 15, 2014. The A-1 tranche was rated triple-A by the S&P, Moody's Investors Service and Fitch.

Class A-2 was $362.1 million and priced three-month Libor + 22.5 basis points with an average life of 4.35 years and a final maturity on December 15, 2025. This class was also rated triple-A by the three rating agencies.

Finally, the pricing on the class B of A$17 million was not disclosed. The final maturity is June 15, 2027. The class-B notes are have a subordination to the class A notes equal to 1.5% of the Australian dollar equivalent of the initial amount invested of all the notes issued.

CSFB reported that investors in Europe and the United States bought the deal, and also that Asian investors bought some of the notes from the A-2 tranche. Australian investors bought the B tranche.

Members Equity is a joint venture established by AXA Australia and Industry Fund Services in October 1999. As of March 20001, Members Equity has about A$5 billion of assets under management.

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