Securitised assets riding the economic cycle upwards
The Australian Bureau of Statistics has reported on the annual and quarterly changes in total asset values of Australian securitisers. In the past quarter, the value of the pool of loans being processed has risen more rapidly than the inflation rate. At 31 December 2017, total assets of Australian securitisers (see note below) were A$132.5 billion, up $7.3 billion (5.9 per cent) on 30 September 2017.During the December quarter 2017, the rise in total assets of securitisers was primarily due to an increase in residential mortgage assets (up $6 billion, or six per cent) and by a similar increase in "other loans" assets (up $0.9 billion, 6.1 per cent).At 31 December 2017, total liabilities of Australian securitisers were $132.5 billion, a rise of $7.3 billion (5.9 per cent) on 30 September 2017. The increase in total liabilities was primarily due to an increase in long term asset backed securities issued in Australia (up $8.6 billion, or eight per cent). This was offset by a notable decrease in short term asset backed securities issued in Australia (down $1.1 billion, 22.8 per cent), and loans and placements (down $0.3 billion, 4.1 per cent).At 31 December 2017, asset backed securities issued in Australia ($119.0 billion) as a proportion of total liabilities of Australian securitisers increased to 89.8 per cent, up 0.7 percentage points on the September quarter 2017 proportion of 89.1 per cent ($111.5 billion). Asset backed securities issued overseas ($3.4 billion) as a proportion of total liabilities decreased to 2.6 per cent, down 0.1 percentage points on the September quarter 2017 proportion of 2.7 per cent ($3.3 billion).(Note: Coverage of the sector by the ABS is limited to those special purpose vehicles, holding pools of loans, which are independently rated by a recognised rating agency. Internal securitisation, or self-securitisation, has been excluded.)