Bank raises residential mortgage cash

by Calida Smylie26 Feb 2014
Bendigo and Adelaide Bank has raised A$500 million of funding in the residential mortgage-backed securities market, partly due to the success of Australia's residential mortgages.
The bank will pay 90 basis points over the one-month bank bill swap rate on the $460 million ‘A’ tranche of the transaction – Torrens Series 2014-1 – which has a weighted average life of 3.4 years, an ASX announcement yesterday showed.
The funds raised are priced below the margins the bank paid on the two deals it did last year, which managing director Mike Hirst put down to the strong performance of residential mortgages.  
“Australian residential mortgages continue to perform well and this was again reflected in the demand and price achieved for our Torrens offering,” he said.
“Not only does this transaction provide us with funding benefits, we have also been successful in attracting investors across all the Note classes, providing capital management benefits for [Bendigo and Adelaide].”

Bendigo and Adelaide raised $850 million in February last year and $500 million in June through RMBS issues. In both cases it paid 95 bps over the swap rate on the A tranches.

In the latest deal, pricing on the $30 million AB tranche, which has a weighted average life of 5.9 years, is 160 bps over swap.

The bank said 17 investors participated in the transaction.