After a fortnight when there was no activity in the primary market for Australian issuers of corporate bonds, commercial paper and asset backed securities, Members Equity Bank broke the drought yesterday with news that it had rolled over $230 million of commercial paper.MEB has a short term funding program called Mustang, which has a total portfolio size of $1.4 billion. The group uses the Mustang program, along with asset-backed securities and bank-funded warehouse facilities, to support its $16 billion mortgage portfolio.MEB chief financial officer Nick Vamvakas said the paper was priced at 30 basis points over bank bills. Last time MEB issued commercial paper the pricing was two basis points over bills. "We have heard of some issuers paying 40 over," Vamvakas said."The investors were all local. The overseas market is gone. The pleasing thing was that there were no banks among the buyers.""We have not had to call on our bank for liquidity support. Our program is used only to fund our own mortgages and we do only prime lending. I think the market is differentiating. We were actually oversubscribed."On August 3 MEB withdrew a residential mortgage backed securities issue from sale. The $500 million Maxis program issue of broker-originated loans had been on the market for a week.Credit dealers and market analysts said pricing had come in a little since the decision of the US Federal Reserve last week to cut interest rates. The iTraxx Australian index, which measures credit default swaps written against a basket of 25 corporate debt issuers, has come in a couple of points through the course of the week.But investors were still staying out of the market. One issuer said his bank had told him that it had put three commercial paper issues, including one of its own, on hold this week.A credit analyst said he had heard from one bank that it had been instructed by the Australian Prudential Regulation Authority to keep it informed of any liquidity it was required to provide on behalf of clients unable to roll over commercial paper and that APRA wanted to see how the banks planned to deal with longer term demands for liquidity.A source said his understanding was that Rams Home Loans, which was forced to invoke the extension provision on its extendible commercial paper program last week, was asked for 70 basis points over bills before it gave up attempts to roll over.In New Zealand the Reserve Bank said it would accept bank bills as security against loans through the RBNZ's overnight lending facility. The central bank told the New Zealand Herald the measure was temporary .Ninety day bank bill rates in New Zealand had spiked at 9.2 per cent on Wednesday but fell back to 8.8 per cent yesterday.Standard & Poor's reported that the last issue of an asset-backed security to make it to market was Series 2007-1 REDs EHP Trust, a Bank of Queensland program that funds its equipment leasing business. That issue, worth $1 billion, was issued on August 10.S&P's