The securitisation markets are beginning to thaw, according to the Reserve Bank of Australia’s assistant governor Guy Debelle.
Mr Debelle said the recent sizeable residential mortgage backed securities (RMBS) issues made by second tier lenders including ME Bank, Bendigo and Adelaide, AMP and the Bank of Queensland, suggest the securitisation market is beginning to show signs of life.
“The spreads on the recent RMBS issues are only a bit higher than those on the recent unguaranteed issues by the major banks of equivalent maturity, and the gap is narrowing,” Mr Debelle said.
“[This is particularly the case] for the regional banks (which pay higher spreads on their debt issues) and non-bank lenders which had both previously depended more on this source of funding,” he said.
According to Mr Debelle, the positivity in the market has come about because the stock of RMBS on issue has declined quite significantly over the past two years reflecting the lack of issuance and the amortisation of the existing issues.
“So investors have holes in their RMBS portfolios to fill,” he said.
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