ME Bank and CNH reopen ABS market

The highlight of last week was ME Bank's successful launching and pricing of the first mortgage-backed securitisation program without the support of the Australian government, via the AOFM.

ME Bank priced A$255.3 million of Class A1 notes at 175 basis points over bank bills, with demand from investors for twice this amount. The structure of the issue, via Maxis SF 2009-1, was as described here last week.

The last non-AOFM backed RMBS issue was undertaken by the FirstMac Group on October 17, 2008. The issue, via FirstMac Mortgage Funding Trust Series 2008-1, included A$152 million of Class A notes with the same weighted average life of 2.2 years. The notes priced at 160 bps over bank bills.  

In a further sign that the structured finance market is continuing to thaw, CNH Capital Australia last week sold A$352 million of asset-backed securities via CNH Capital Australia Receivables Trust Series 2009-1.

However, the fact that CNH sold only A$126 million of Class A-1 notes, with a weighted average life of just 0.6 years, in the public market suggests we shouldn't get too excited.

The remaining tranches - A$200 million of 'AAA' rated Class A-2 notes with a 1.8 year weighted average life; and A$26 million of 'AA' rated Class B notes with a 2.8 year weighted average life - CNH privately placed. There was also A$47.2 million of seller notes included in the transaction, ensuring CNH Capital Australia maintains an ongoing and significant interest in the transaction.