By: Staff Reporter
Competition is well and truly starting to emerge in the home loan market, as investors show an increasing amount of support for small lenders looking to raise money from the credit markets.
Bendigo and Adelaide Bank managed to raise $1.1 billion in a residential mortgage-backed securities issue – $450 million more than it was originally seeking.
Earlier this month, the second tier lender said it would tap investors for $650 million.
However, the bank’s chief executive Mike Hirst said demand from a wide range of domestic and overseas investors meant Bendigo and Adelaide Bank not only had to increase the size of the transaction but also scale back a bid from the federal government’s Australian Office of Financial Management (AOFM) to acquire a large chunk of the units.
According to a report in BusinessDay, the AOFM was prepared to invest $250 million in the Class A notes, priced at 135 basis points above current short-term money market rates.
"This offering demonstrated the solid demand which exists for high-quality residential assets," Mr Hirst said.
"I believe the pricing represents good buying for investors despite a turbulent international market environment."
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