BNZ securitises NZ$6.5 bln of mortgages; RBNZ drains NZ$700 mln

The BNZ has joined ANZ National and Westpac in building a Residential Mortgage Backed Security (RMBS) facility that can be used as collateral to borrow from the Reserve Bank.

BNZ’s RMBS facility totals NZ$6.5 billion, including NZ$6.329 billion of AAA rated Class A notes and NZ$162.3 million of unrated Class B notes. The pool covers 51,749 loans with a current loan to valuation ratio of 55.7% and a weighted average maturity of 29.4 months.

The BNZ facility brings the total RMBS facilities announced by ANZ National, Westpac and BNZ to NZ$15.21 billion, which represents 9.9% of the NZ$153.2 billion of mortgages issued by New Zealand’s banks. ANZ National has previously announced a NZ$3.71 billion series called Kingfisher NZ Trust 2008-1, while Westpac set up a NZ$5 billion facility. The odd one out of the big four now is ASB, although it is also thought to be building a facility.

Meanwhile the Reserve Bank used its new Reserve Bank Bill facility yesterday to drain NZ$700 million from the system, having injected NZ$500 million on Wednesday through its new Term Auction Facility (TAF) that accepted RMBSes as collateral. Interestingly, the Reserve Bank is receiving 6.29%, 5.93% and 5.65% respectively for the 3 month, 6 month and 12 month reverse repos, but is paying 6.40% for its Reserve Bank Bill facility. Full results are here.

This article has kindly been republished courtesy of interest.co.nz.  To view this article and other news updates from interest.co.nz click here.

Posted: 15 Nov 2008

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