Australian Central and Wide Bay secure AOFM backing

One credit union and one building society have attracted support from the Australian Office of Financial Management in the latest round of funding from the government for home loan providers.

Australian Central Credit Union, based in Adelaide, and Wide Bay Australia, based in Bundaberg, will both receive around $500 million in funding from the AOFM through forthcoming securitisations of home loans for each lender.

The AOFM said it plans to announce only one more set of mandates from the second selection round once the transactions announced yesterday are completed.

The government's financing agency has already invested a little more than $6 billion in 13 securitisation transactions since the government said the AOFM would help provide liquidity to non-banks and smaller banks in late October 2008.

The funding for Australian Central and Wide Bay will consume another $1 billion and leave scope to fund only two more lenders under the current allocation.

There is some industry lobbying for an extension of the government support for the home loan sector, though the ballooning level of the Australian government's own debt funding needs since the policy was devised eight months ago indicate the prospects of an extension are slight.

Members Equity Bank and Resimac recently completed the sale of AOFM-supported mortgage-backed securities, while FirstMac finalised pricing for its latest bond deal on Monday.

FirstMac sold $525 million on RMBS. The AOFM invested $499 million and five other investors $126 million.