Competition bright as smaller lenders secure funding

The raising of $1.3 billion in funds announced earlier by smaller mortgage lenders has sent a strong signal that specialist credit markets are beginning to thaw. 

Investor confidence in RMBS is returning at a rapid rate as new competition is injected in to the home loan market, according to a report in BusinessDay.

CUA, originally looking to raise $500 million, had its issue oversubscribed and lifted its offering by another $150 million - to its maximum size.

"The success of this issue allows [us] to remain a highly competitive player," said CUA chief executive Chris Whitehead. 

Also, Bendigo and Adelaide Bank has begun sounding out investors about a $650 million issue of home loan securities.

Almost all of the package will be made up of triple A rated investments backed by prime residential mortgages. It is Bendigo's second fund-raising move using home loan securities in three months.

This has taken the total for major RMBS issues to $7 billion since December.  

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