Bluestone Group on Friday finalised pricing on what may prove the last public bond issue of the year, at least in the asset-backed sector.The group sold $408 million of non-conforming mortgages via the Sapphire XI Series 2007-2 Trust.The weighted average loan to value ratio in the pool is 75.5 per cent. Seventy one per cent of the loans are low doc and the average seasoning is 12 months.While comparisons with the group's corresponding New Zealand dollar transaction priced six weeks ago may be dicey, the mortgage funder is paying fatter spreads on this transaction than it did then.Bluestone agreed to pay a margin of 108 basis points over the one month swap rate on the super senior tranche with an average life of 1.85 years; 165 basis points over on $82 million of senior notes with the same average life; 200 basis points over on $58 million of junior notes, and spreads of between 265 and 650 basis points on another four tranches. Bluestone did not disclose pricing on the two most deeply subordinated tranches.In a corresponding deal back in March (for $806 million in securities) Bluestone paid a spread of 20 basis points more than swap on the super senior tranche and 360 basis points over on the seventh tranche.Alastair Jeffery, managing director of Bluestone, said the firm and its investment banks approached about 25 investors with about 12 investing in the trust.Without being explicit about the investors Jeffery said "we could anchor the deal at the top end with very big, well known investors who've been a bit out of the market the last couple of years. Those guys are back in now we're back at 100 over."While there's reputedly a degree of private placement activity going on to refinance mortgage funders otherwise dependent on public debt markets, Jeffery said he was happy to publish the cost of funding to his firm.He described the market as "sticky and illiquid … of the 100 plus [pricing] the liquidity spread is about 50 basis points. That's the premium the investor requires to actually mobilise capital."Asked about Bluestone's recent business Jeffery said the firm was writing about $60 million a month in new loans and while there was demand for more than that the firm was deliberately limiting new business to that level.Most new business is now limited to a loan to valuation ratio of 70 per cent, down from 75 per cent, with any new loans with an LVR of 85 per cent or more limited to about five per cent of all lending.