CUA bond undersized

Philip Bayley
Investment banks assisting Credit Union Australia publicised details of the mortgage-backed bond in which the Australian Office of Financial Management is the cornerstone investor.

The transaction, that will refinance a $482 million pool of home loans, is small, given that AOFM has previously made $500 million investments in the issues it has supported.

It is not clear whether this points to a lack of suitable CUA mortgages to securitise or a lack of investor demand.

Finally, details of the first of the AOFM-backed RMBS issue for the year emerged on Friday, when S&P released the preliminary ratings for Credit Union Australia's vehicle,

CUA is selling the bonds through the Series 2009-1 Harvey Trust in four tranches: Class A-S, $105 million, rated 'AAA' by Standard & Poor's; Class A-1, $350 million, rated 'AAA'; Class A-2, $13.5 million, 'AAA'; and Class B, $13.5 million, 'AA-'.