In the past six weeks some A$5.7 billion of mortgage-backed or asset-backed transactions have been priced and for the most part, sold in the domestic market. With the exception of two Macquarie Leasing ABS issues and the Bella Trust No. 2 Series 2011-2 ABS issue launched last week, the transactions have all involved the sale of prime RMBS - $4.3 billion in total.Indeed, the structured finance market has recently demonstrated greater strength of issuance and seemingly, investor demand, than the corporate bond market. The latter saw only A$3.3 billion of corporate bonds issued in October, and just a lone A$125 million issue so far this month.The ongoing turmoil in global financial markets can readily explain the weak performance of the corporate bond market but it is harder to explain what is happening in the structured finance sector. The supply of structured notes is running at arguably the highest levels for this year, and issuance in the year to date now exceeds the 2010 total. But the pricing of prime RMBS is back to where it was when the Australian Office of Financial Management first started buying prime RMBS at the height of the financial crisis in late 2008.AOFM is still active in the market, having participated in three prime RMBS issues over the last six weeks, including the IDOL Trust Series 2011-2 issue for ING Bank (Australia), with the main tranche priced at 135 bps over swap. In December 2008, AOFM participated in its third RMBS issue on behalf of Challenger Mortgage Management (a business since sold to National Australia Bank). On that occasion the AOFM and a handful of other investor priced the bonds in the main tranche at 135bps over the bank bill rate. The senior tranches of the two prior RMBS issues in 2008 that featured AOFM as an investor were priced at 130 bps and 125 bps respectively.Is it a case of reluctant investors and a number of forced sellers that explains the current volume of RMBS transactions, in an environment of steadily widening credit spreads? If it is, then the volume of issuance is probably about to come to an end.Just before AOFM entered the market in late 2008, there was a widely held view that RMBS issuance ceases to be viable when spreads move to 150 bps over bank bills for the senior tranche. Even issuance at 140 bps was considered to be a marginal proposition.If RMBS issuance is to continue from here, AOFM needs to return its attention to the other requirement of its investment mandate - keeping the cost of issuance affordable. Initially, AOFM was buying RMBS notes at levels considered to be below market and it was effective in bringing the market price down as a result.