AOFM invests $3.4bn in RMBS
By
Andrea Lavigne
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29/01/2010 8:26:00 AM
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The Australian Office of Financial Management announced yesterday it will invest up to $3.4bn in RMBS to five issuers.
The investment is part of the government's $8bn extension to the AOFM's RMBS program last year, which doubled its original investment made in 2008.
The recipients of the investment include Resimac, Liberty Financial, Members Equity Bank, Firstmac and AMP Bank. They will receive "pipeline" funding, which means each issuer will have AOFM support for RMBS issuances until 15 Dec.
It is understood that the latest investment will be slightly different from last year, in that the participation of the AOFM will be reduced as outside investor participation is expected to pick up in 2010.
"The announcement provides more funding security for these smaller lenders and will allow them to keep lending," said Treasurer Wayne Swan. "This will place more competition on the big banks, helping to put downward pressure on mortgage rates over time."
Swan's announcement precedes the RBA's decision on rates, scheduled to be announced next week.
Related stories:
AMP RMBS doubles in pricing - The first Australian RMBS of 2010 received strong investor interest, pricing at $1bn - almost twice the expected $543.5m.
Big Four set sights on RMBS market - The return of the majors to the local securitisation markets will provide a boost as it continues to recover from the effects of the GFC.
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