Tailwinds and asset performance bring new support for Avanti
Avanti Finance printed New Zealand’s second residential mortgage-backed securities (RMBS) deal in just over a month, on 9 October – a feat that seemed highly improbable earlier in the year. Sound origination standards and technical tailwinds have caused interest in the asset class to jump, the issuer says.
Responsible lending: unleashing banks, leashing nonbanks?
The Australian federal government has proposed changes to responsible-lending rules, with the goal of encouraging credit supply and thus maximising the economic impact of ultra-low rates. Nonbank lenders are watching developments closely and with some concern that they may further tilt the playing field in favour of authorised deposit-taking institutions (ADIs).
No surprise in AOFM’s 2020/21 task but RBA help may be needed
On 7 October, following the announcement of the Australian federal government budget, the Australian Office of Financial Management (AOFM) revealed an expected funding requirement of around A$240 billion (US$170.5 billion) for the 2020/21 financial year. The announcement was no surprise to market watchers, but some analysts expect the Reserve Bank of Australia (RBA) may need to step up its market intervention.
Australian dollar securitisation issuance bounces back
Australia’s securitisation market has maintained deal volume at a level in line with outcomes from recent years despite massive upheaval to the supply and demand picture in 2020. In particular, bank issuers have been all-but absent this year but a particularly active September for new issuance kept annual volume robust.
TFF volume meets initial allowance but credit demand still soft
Authorised deposit-taking institutions (ADIs) picked up their usage of the Reserve Bank of Australia (RBA)’s term funding facility (TFF) before its cut-off date on 30 September, eventually subscribing for almost all their original allowance. While the RBA says the scheme is achieving its goal at least some market participants are concerned about its distortionary effect.