Smaller lenders pay a 10 bps to 15 bps premium for RMBS funding

Bank of Queensland has returned to the residential mortgage-backed securities market for the first time since July 2013, raising A$900 million of funding.

Series 2015-1 REDS RMBS Trust was launched early last week with an indicative issue size of $500 million. The bank said that local and overseas investors supported the issue.

BOQ will pay 90 basis points over the one-month bank bill swap rate on the $828 million of A notes, which have a weighted average life of 2.9 years.

Pricing on the $50.4 million of AB notes was 180 bps over the swap rate.

Pricing on the $16.2 million of B notes was 235 bps over swap, pricing on the $4.5 million of C notes was 300 bps and pricing on the $900,000 of D notes was 485 bps.

The AB, B, C and D notes all have a weighted average life of 6.7 years.

BOQ is paying the same margin on the A notes that Macquarie paid on its $2 billion PUMA issue last month and five bps less than CUA paid on the A notes of its $750 million Harvey Trust issue, also last month.

Among big bank RMBS issuers this year, Commonwealth Bank and National Australia Bank each paid margins of 80 bps on their A notes.