ABIP chair named

David Borthwick is the Australian government's selection to be chair of the board of the proposed Australian Business Investment Partnership.

Borthwick recently retired as secretary of the Department of Environment, Water,
Heritage and the Arts. He is a former deputy Secretary of Treasury.

ABIP is the commercial property lending vehicle that the government and major banks plan to use as a backstop to plug any severe reduction in lending by foreign banks to the sector.

Evidence on this point is still patchy. Some borrowers complain of the availability of bank finance (Austcorp, which faced up to its own insolvency last week, being a case in point). Lenders (domestic and foreign banks) also talk of approaches from other foreign banks to take out their own loan to developers.

In its quarterly statement on monetary policy, published on Friday, the Reserve Bank of Australia noted that "foreign lenders do not appear, at present, to be withdrawing from syndicated lending for Australian business."

The RBA said that for individual loan facilities refinanced during the March 2009 quarter "there was no evidence of a systematic withdrawal by foreign lenders, with foreign lender participation in recent approvals similar to their share over the past year."

The central bank also noted that over the remainder of 2009 and through 2010 about $156 billion in syndicated loans would mature with about 10 per cent of these relating to real estate companies.

The Senate is yet to pass the bill establishing ABIP. If a report by the Senate's economics committee last week is any guide the government (and the banks) will need to agree to the appointment of more than a single director from outside the banks in order to win the support of the Greens for the bill.