SOURCE: The Age (Melbourne, Australia)
DATE: May 30, 2008 Friday First Edition
At least the big banks have the comfort of large depositor bases to fund their lending. Australia's non-bank lenders are doing it hard.
Look no further than the mighty GE Money considering the sale of its Australian home-loan business, not to mention moves by the big banks to exploit the Reserve Bank liquidity program if need be, and the decision by Macquarie to exit its mortgage business.
Under recent arrangements, the RBA even set up a facility that allows the banks to swap their securitised mortgages - bundles of mortgages, that is - for bonds they can in turn liquidate for cash.
At least the big banks enjoy the comfort of large depositor bases to fund their lending. No such luck for non-bank lenders. Until the credit market crisis mid-last year, they had relied on securitising their loans and selling them. Even the big banks can't sell their securitised loans now.
The upshot for the smaller NBLs (non-bank lenders) has been that they have been forced to sell to a big player, get out of the market or refinance on short-term commercial paper markets at far higher rates. The short-term refinancing solution is a "plugging the holes" tactic.
In securitisation, the long-term maturity profile of the asset (the loan) is matched with the liability (the funding). But in commercial paper markets, the smaller lenders have been forced to scramble to refinance every few months.
SOURCE: The Australian Financial Review
DATE: May 29, 2008 Thursday
The mortgage-backed securitisation segment of the Australian money market is showing signs of recovery from the global credit crisis. In late May 2008, there have been a number of new issuances, including by major investment banking groups such as Macquarie or Citibank. Experts note that primary issuance is being revived as the backlog of secondary supply is being cleared. However, as the example of GMAC Financial Services illustrates, the moves are still priced at relatively expensive levels.
SOURCE: Thomson Financial News Super Focus
DATE: May 27, 2008 Tuesday 5:10 AM GMT
Above 30-days arrears in residential mortgage loans underlying prime Australian residential mortgage-backed securities (RMBS) transactions rose by four basis points to 1.28 percent in February and further increases in arrears are expected. The proportion of borrowers with loans that are more than 90 days in arrears remained above 7 percent of all securitised subprime loans, at 7.42 percent, highest level for this category since November 2000.
