insto - Australian financial markets

What a quiet week due to holidays in China and the US. However, we saw the third government guaranteed issue since the announcement of the withdrawn of the wholesale bank funding guarantee, a highlight $2bn 5yr transaction from ING last Thursday.

ING A$2bn 5yr GG Bond

As the old ad slogan once said, “Oils ain’t oils”. The same could be said for AAA-rated investments in securitised mortgages – yes, even in Australia.

It’s been a good couple of weeks for the bankers all around the country who specialise in securitisation. And with good reason: a handful of well-supported RMBS deals done recently are being interpreted as signs that even this very niche part of the banking industry is now following the rest of the economy upwards.

Bendigo and Adelaide Bank has announced the marketing of its latest mortgage backed securities issue under the TORRENS securitisation program, Series 2009-3 Trust. The bank noted that this the first RMBS from a regional bank without the support of the AOFM this year. The issue will be backed by Australian prime residential mortgages originated by Bendigo Bank.

The ABS markets have been dormant for a year, cutting off funding to niche lenders. But were obituaries for Australia’s non-bank mortgage originators written prematurely, asks Lachlan Colquhoun.

Several September deals have encouraged issuers and also investors to think there is life in the assetbacked securitisation markets yet. These may be only stirrings, but among issuers at least there is a consensus that the next 12 months will be an improvement on the last period of darkness.

If there was any doubt that 2009 was the year that the domestic bond market had got its groove back, it was well and truly erased in the third quarter, reports Jonathan Shapiro.

Conditions continued to improve, increasing the confidence of both issuers and investors.

From July to September, over A$30 billion of non-government bonds were printed, making it the busiest period of the year, exceeding Q2 total issuance by A$10 million and more than double the amount issued in the third quarter of 2008.

The US bond markets have thawed so much in recent times that Australian and UK issuers prepared to deal with currency risks are also finding a warm welcome.

The local securitisation industry spent the week assessing the merits of the Treasury’s decision to extend the AOFM's RMBS investment scheme.

The announcement came at a time when the market for mortgage backed securities was in the early stages of resurrecting itself, but the commitment of new funds means that it may be a while yet before the market stands on its own two feet.

The treasurer has announced an extension to the Government's investment in Australian residential mortgage-backed securities. The Government will direct the Australian Office of Financial Management to provide up to a further $8 billion of support to new issuances of high-quality RMBS, depending on market conditions. This decision follows the near completion of the Government's $8 billion investment in RMBS announced in 2008.