Low doc may TRIOMPHE yet

Resimac yesterday launched the first public low-doc, prime mortgage-backed securities issue seen in the domestic market for almost two years. The timing of the transaction will test the strength of the re-emerging domestic RMBS market, at a time when global financial markets are experiencing increased volatility and investor risk aversion, in the wake of fears that the Greek bail-out will fail.

Resimac, through the Triomphe Trust - Resimac Premier Series 2010-1 will seek to sell a minimum of $250 million of RMBS comprising $226 million of Class A, AAA-rated notes with a weighted average life of 2.4 years; $17.75 million of Class AB notes, also rated AAA, with a life of four years; $5 million of Class B1 AA-rated notes with a life of 3.7 years; and $1.25 million of Class B2 notes, rated AA- by only one credit rating agency and with a life of five years.  

Indicative pricing for the Class A and Class AB tranches is 165 basis points and low 200 bps over the 30-day bank bill rate. The Australian Office of Financial Management is expected to participate in the transaction.

The last public low-doc prime RMBS issue was a $208 million offering from the Columbus Capital vehicle, Nautilus Trust No.1 2008-1 in July 2008. The $146 million Class A senior tranche with a WAL of just 1.6 years was priced then at a spread of 235 bps over bank bills.

Macquarie Securitisation privately placed $1.2 billion of prime low-doc RMBS in March via PUMA Masterfund S-8. Pricing on the 2.9 year WAL, Class A2 tranche was 165 bps over bank bills.

Pricing for this latest issue is expected next Wednesday.

Resimac launched a new mortgage lender, Hemisphere Financial Solutions, in February. Last month Hemisphere announced that it would lend to borrowers up to 95 per cent of the valuation of the property being purchased.