BOQ raises $850m through RMBS issue

0
67

Bank of Queensland Ltd (BOQ) raised $850 million from an increased residential mortgage-backed securities (RMBS) offering to domestic investors, signalling the local RMBS market is returning to normal.

BOQ increased the size of the deal from $500 million after an initial over-subscription by investors for three tranches of notes from the bank’s 2010-1 REDS Trust series.

Twenty investors, including the Australian Office of Financial Management (AOFM), participated, with the AOFM taking $250 million worth of Class A Notes.

The Class A Notes were priced at 130 basis points over swap, while the Class AB Notes were priced at 175 basis points over swap, and the Class B Notes were privately placed, BOQ said in a statement on Tuesday.

BOQ’s managing director, and deputy chairman of the Australian Bankers’ Association, David Liddy, said the level of investor demand was a strong endorsement of BOQ’s franchise and solid collateral.

“The bank has been active in government guaranteed term debt markets with the strategic goal of increasing our term debt maturity profile,” he said.

“This deal shows a return to more traditional sources of funding for regional banks, as markets improve.”

John Claudianos, head of new issue at arranger Deutsche Bank’s credit solutions group, said the transaction was the latest in a series of recent RMBS transactions that saw $5 billion of RMBS transactions placed since the December 2009 quarter.

Deutsche Bank, Royal Bank of Scotland and Westpac Banking Corporation were the joint lead managers.

BOQ’s issue comes two days after the federal government announced it would end its wholesale funding guarantee for local institutions on March 24.

Global ratings agencies noted the government’s action would have no material impact on the credit ratings of local banks.

On Tuesday Fitch Ratings Ratings also noted “encouraging signs that Australia’s mortgage securitisation market is beginning to thaw.”

AAP

About the author

LEAVE A REPLY

Please enter your comment!
Please enter your name here