Aussie RMBS needs more offshore investors

Author: Ashley Lee | Published: 17 Oct 2013

  • Australian RMBS issuers said that they have seen increasing interest from offshore investors this year, marking their return following the 2008 financial crisis;
  • Issuers are looking to foreign currency tranches to diversify their funding sources but swap costs back into AUD are an issue;
  • The introduction of master trusts into the Australian securitisation market would reduce the cost of swaps, facilitating the creation of foreign-currency tranches.

Although securitisation throughout most of the Asia-Pacific region has been slow to pick up following the financial crisis, Australia’s sophisticated residential mortgage-backed securitisation (RMBS) market is looking farther afield for new investors.

Australia’s RMBS market was largely unscathed throughout the financial crisis due to the implementation of the Australian Office of Financial Management’s RMBS purchasing programme to support competition in the...