A more positive tone also appears to building in the market for mortgage-backed securities, but perhaps not quite to the same degree. Challenger Mortgage Management became the second originator to upsize its RMBS issue on stronger than expected investor demand, last week. Bank of Queensland was the first to do so just two weeks earlier. Challenger's Millennium Series 2009-1 Trust RMBS issue was increased to $632.1 million from $500 million, with the largest increases seen in the Class A3 and A4 tranches to $202.5 million from $160 million and to $289 million from $229 million, respectively. Insto reported that AOFM took up all of the Class A4 and AB notes but only $152.5 million of the Class A3 notes. This means there was reasonable investor interest in the remainder of the Class A3 notes, which have a weighted average life of 1.53 years, rather than less than one year, where investor interest has been focused to date. The other notable aspect of the deal was the pricing of the Class A1 notes at 70 bps over bank bills for a WAL of 0.19 years. Recent comparable short-dated tranches have priced at 90 bps over.Pricing on the other tranches came in at: Class A2, 100 bps over bank bills; Class A3, 130 bps over; Class A4, 145 bps over; and Class AB, 170 bps over. Liberty Financial priced its Liberty PRIME Series 2009-1 Trust RMBS issue late on the Thursday before Easter and so it was not reported until last week. Pricing was only disclosed for the first four tranches: Class A1, 90 bps over bank bills; Class A2, 120 bps over; Class A3, 140 bps over; and Class AB, 165 bps over.Insto reported that in this case AOFM purchased all of the Class A3 and AB tranches and $164.7 million of the Class A2 tranche and $14.5 million of the Class A1 tranche.By our calculations, AOFM has sponsored ten RMBS issues and invested $4.8 billion of the $8.0 billion that has been allocated for this purpose. It is encouraging that investor demand appears to be increasing and clearly multi-tranching with more short WAL tranches is the way to go, but it remains less than certain that investors will be ready to take AOFM's place once it is fully invested.