ME Bank prices A$665 million SMHL RMBS issue

Wednesday, 12 October 2011

Members Equity Bank Pty Limited (“ME Bank”) has today priced its second RMBS issue for 2011, the A$665 million SMHL Series Securitisation Fund 2011-2 (“SMHL 2011-2”) RMBS issue.

National Australia Bank Limited acted as Sole Arranger and Joint Lead Manager in conjunction with Australia and New Zealand Banking Group Limited and Macquarie Bank Limited.

The issue comprises of three classes of bonds, Class A, AB and B Bonds. The A$621.75 million Class A Bonds, to be rated AAA by Standard & Poor’s (“S&P”) and Fitch Ratings (“Fitch”), have an expected weighted average life of approximately 3.0 years and priced at a margin of 125 basis points over one month BBSW. The A$25.25 million Class AB Bonds, also to be rated AAA by S&P and Fitch, have an expected weighted average life of approximately 5.3 years and priced at a margin of 210 basis points over one month BBSW. The A$18.0 million Class B Bonds are to be rated AA- by S&P only and have an expected weighted average life of approximately 5.3 years. The pricing on the Class B Bonds was not disclosed.

The Class AB Bonds and Class B Bonds, represent 6.5 percent subordination, ensuring that the rating on the Class A Bonds will be independent of a Lenders Mortgage Insurer (“LMI”) downgrade by S&P and Fitch as at the issue date.

“The increase of the deal from its initial launch amount was a positive result in the background of difficult financial market conditions. The transaction had good support from a number of investors including the AOFM” Paul Garvey, General Manager Funding and Financial Markets, ME Bank.

The issue was launched on 11th of October and was upsized from an initial launch size of $500 million to $665 million. The AOFM participated in the Class A Bonds for an aggregate of $175.25 million and the Class AB Bonds for an aggregate of $25.25 million.

The transaction is expected to settle on the 19th October 2011.

Media Contacts

NAB:
Cherry Dinh
M: +61 (0) 467 737 734

John Barry
T: +61 (0) 3 8641 4185

ME Bank
Paul Garvey
T: +61 (0) 3 9708 3202