Login or request a free trial

RMBS market ends the year with very sharp pricing

ME Bank has raised A$1 billion through an issue of residential mortgage-backed securities, pricing at the tightest margins seen since the beginning of the pandemic and possibly longer.

ME is paying a margin of 70 basis points over the one-month bank bill swap rate on the $920 million of A notes, which have a weighted average life of 2.7 years and are rated AAA.

All the other notes have a weighted average life of 4.9 years. Pricing on the $35.5 million of AB notes was 135 bps over BBSW, the margin on the $17 million of B notes was 175 bps and the margin on the $12.5 million of C notes was 215 bps.

The Australian Bureau of Statistics reported yesterday that total assets of securitisers fell 1.6 per cent to $152.4 billion during the September quarter, compared with the June quarter. This follows a fall of 1.6 per cent in the June quarter.

The drop is largely due to the big banks staying out of the market. Non-banks and small ADIs have been active.

 

 

I'm a returning subscriber

Password reset
Login

Request a free trial

  • Emailing you the news at 7am.
  • Covering core lending and funding issues, strategy, payments, regulation, risk management, IT, marketing and more.
  • Original news and summaries of major stories from other media – ditch your newspaper subscriptions.
  • Focused on banking and finance, saving you the time spent wading through newspapers and other services.
  • With reporting from former editors and senior writers from the AFR and The Australian.
  • Configured for your phone, laptop and PC.
Free trial Banking Day