Macquarie reassures on funding

Macquarie Group has raised term funding of $17 billion since August last year and grown deposits by 30 per cent to $13.2 billion.

Macquarie chief financial officer Greg Ward was keen to reassure the market that the group's funding position was secure.

He said the average maturity of the debt was 2.5 years from the balance date.

Under the non-operating holding company structure that was put in place last year Macquarie has two primary external funding vehicles. Macquarie Group provides funding to the non-bank operations and Macquarie Bank provides funding to the banking operations.

Macquarie Bank has also provided a transitional bridging loan to Macquarie Group as part of the restructure. The bridging loan is an unsecured amortising two year commitment. At March 31, $8.8 billion was outstanding.

The bank has a total funding requirement of $72.8 billion.

Ward said funding sources were diversified and included $13 billion of deposits, $12 billion of certificates of deposit, $8.2 billion of secured funding, $9 billion of equity and $7.6 billion of commercial paper. The bank raised all its wholesale debt since the credit crunch hit by way of private placement rather than through public bond issues.

Spreads have increased on deposits by 20 basis points since August last year. Offshore commercial paper spreads are up by 30 basis points over the same period.

Spreads on secured finance are up by 20 to 100 points with a weighted average of 30 basis points, and a $225 million three-year term facility was up by 110 basis  points.