International rating agency Moody's believes the Australian structured finance market will pick up in the second half of the year following a drop in such deals during the first six months of this year.The volume of Australian structured finance securities issuance fell 3% to A$16 billion compared with the same period in 2001. Moody's said the tail-off was caused by a number of cross-border residential mortgage-backed securities (RMBS) deals that were marketed in Q2 not now being booked until Q3 this year."Even though only a small number of transactions have so far been completed, Moody's believes the non-conforming RMBS market shows healthy developments, with the supply boosted to A$591 million from A$127.5 million in the first half of 2001," said Patrick Eng, senior vice-president in Moody's structured finance group. Eng said Moody's expected more Australian RMBS issuers to seek global MBS issuance to expand their cross-border investor base beyond the traditional euro market.
He added that the property trust sector should continue to drive commercial mortgage-backed securities issuance, albeit in modest volumes, in the near term.
Future asset-backed securitisation growth should stem from a broadening of asset class deals, with auto and equipment leases, residential development project financing and lease payments securitisations from high credit quality tenants the most likely areas.
More on Structured Products
Lower deposit rates will force investors to take more risk
Software from Calastone seeks to bring structured products into the digital age
Regulation and low interest rates pose greatest challenge
Tim Mortimer on the value of put options in structuring
Sign up for Risk.net email alerts
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
Nominated for two technology awards
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.