insto - Australian financial markets

Colonial First State Capital Management is set to launch the first CMBS issue in the Australian market in 2010. The A$683m notes, 2010 Notes of the CMBS Issuer Series 1 (2007), will be the second CMBS program for CFSCM.

Details are:
Issuer: Colonial First State Capital Management
CMBS Issuer Security Trustee: Perpetual Trustee
Liquidity Provider: ANZ(AA/Stable/A-1+)

Expected Closing Date: 21 Mar 2010
Scheduled Maturity Date: 21 Mar 2013
Final Maturity Date: 21 Mar 2015

Loan-to-value Ratio: 32.14pct
Debt-service-coverage Ratio: 2.53
Preliminary Ratings:

Bendigo and Adelaide Bank launched its latest AUD RMBS, TORRENS Series 2010-1 Trust, on Wednesday. The deal is expected to have a volume of $650 million.

The transaction will be structured in three tranches and backed by Australian prime residential mortgages originated by Bendigo Bank.

The Class A Notes will be listed with the ASX.

Details are:
• Class A, AAA/Aaa, $601m, WAL 2.8yrs, Credit Enhancement 7.5pct
• Class AB, AAA/-, $39M, WAL 4.9yrs, Credit Enhancement 1.5pct
• Class B, AA-/-, $10m, WAL 4.9yrs

Legal Final Maturity: May 2042
Joint leads: Deutsche Bank, Westpac

Credit Union Australia plans to sell its first RMBS transaction in 2010 - A$500m Series 2010-1 Harvey Trust- via Westpac (AA-, stable).

Details are:

Issuer: Credit Union Australia
Amount: A$500m
Lead Manager: Westpac
Legal Final Maturity: April 2041
Trustee: Perpetual Trustee Company
Insurers: QBE Lenders Mortgage Insurance, Genworth Financial Mortgage Insurance

Class A-1 Notes:
Amount: A$470m
Expected Ratings: AAA/AAA
Average Life: 2.9yr

Class A-2 Notes:
Amount: A$20m
Expected Ratings: AAA/AAA
Average Life: 5.1yr

Class B Notes:
Amount: A$10m

Westpac priced a $2 billion RMBS, known as the Series 2009-1 WST Trust, on 18 December. Originally launched for just A$1bn on 14 December, this was the first RMBS issued by a major Australian bank since the GFC pushed structured finance deals off the radar of all banks. The $1.84 billion Class A notes comprise the second largest AAA tranche ever been launched in the Australian market.

Details are:

• Total Amount: A$2bn
• Pricing Date: 18 Dec 2009
• Settlement Date: 23 Dec 2009

Class A Notes

Westpac has launched $1 billion RMBS, known as the Series 2009-1 WST Trust. It is the first RMBS issue by a major Australian bank since the GFC. The RMBS issue is only available to institutional investors and will consist of:

• A$920m of Class A Notes expected to be rated AAA/Aaa
• A$55m of Class B Notes expected to be rated AA/Aa1
• A$25m of Class C Notes will be unrated
Class A notes will benefit from 8% subordination provided by the Class B and C notes.

Moody's said that mortgage borrowers' ability to repay their mortgages -- as measured by delinquencies rates -- continues to improve for both prime and non-conforming RMBS transactions despite a backdrop of increasing interest rates.

“This is because the overall rate reductions since September 2008 mean borrowers are still enjoying significantly lower repayments, and unemployment is still relatively low and is expected to peak at levels much lower than forecast at the start of the global credit crisis,” said Arthur Karabatsos, Moody's senior analyst.