After tightening for much of the year, margins on residential mortgage-backed securities appear to have settled.

Australian Finance Group released details of its latest RMBS issue, with the senior notes of AFG 2021-2 priced at the same margin as the senior notes of AFG 2021-1, which was priced in May.

AFG has raised A$500 million of funds in the latest deal, after going to the market seeking $350 million.

The A1 notes, worth $450 million and with a weighted average life of 2.5 years, were priced at a margin of 75 basis points over the one-month bank bill swap rate.

The A2 notes, worth $30 million and with a weighted average life of 4.3 years, were priced at 115 bps over one-month BBSW.

During the course of the year a number of issuers, including Resimac, La Trobe Financial and Pepper Money reported their best pricing in over a decade.

The end of this tightening may reflect widening spreads in other sectors of the fixed income market or some weakening in demand after what has been a period of strong issuance.