No margin for Heritage 13 July 2009 5:02PM Philip Bayley Heritage Building Society indicated that it is no longer going to bother with mortgage-backed securities as a source of funding and will rely on the corporate bond market instead. Heritage last week issued A$200 million of July 2012 and July 2014 FRNs priced at 75 basis points and 85 bps respectively, over bank bills, with a government guarantee.For the triple B rated building society this gives a blended all-up cost of funds of 230 bps over bank bills, after allowing for the 150 bps guarantee fee. Furthermore, after allowing for a 90-day bank bill rate of say, 3.10 per cent, Heritage will pay 5.4 per cent on the FRNS for the first 90-day period. On its website Heritage is advertising a standard variable mortgage rate of 5.3 per cent.