Bendigo Bank prices $400m Banksia issue
Bendigo Bank yesterday priced its Banksia Trust Series 2002-1 $400M mortgage backed securitisation issue.
This is the second issue under the Banksia Trust Master Agreement, the first being the $400 million Banksia Trust Series 2001-1 issued in March 2001. The current transaction was well received by the market, over-subscribed and with wider distribution and increased investor support.
Bendigo's Managing Director, Rob Hunt, said the over-subscription showed that the market recognised the quality of the Bendigo Bank portfolio and that the Fixed/Floating rate structure appealed to a wider array of MBS investors than traditional floating rate pass-through transactions.
"The Banksia issues provide the bank with a flexible and effective capital management tool and a cost-efficient form of wholesale funding to supplement our traditionally strong retail-funded base.
"The pricing achieved in the latest issue enables Bendigo to compete on an equal footing with larger financial institutions while retaining our strong customer and community focus."
The $240M Class 'A1' fixed rate tranche priced at 32 basis points over the 3 year swap rate, the $152M Class 'A2' floating rate tranche priced at 37 basis points over quarterly BBSW and the subordinated $8M Class 'B' floating rate note tranche priced at 53 basis points over quarterly BBSW. The Lead Manager for the deal is Deutsche Bank and Co-Manager is Westpac Banking Corporation.
The weighted average margin over time ("WAMOT") on the deal is 32.9 basis points over a weighted average life of 4.6 years which compares favourably with the previous Banksia Issue.
Banksia Trust Series 2002-1 comprises a soft bullet Class 'A1' A$240m fixed rate tranche maturing July 15 2005 and were marketed at 30 to 33 basis points over 3 year swap, and a A$152m of quarterly pay Class 'A2' floating rate notes with an expected life 6.3 years that were marketed at 37 to 39 basis points over 90 day BBSW.
Standard & Poor's rates both tranches AAA. There is also a subordinated Class 'B' tranche rated AA- and sized at A$8m, equivalent to 2.0% of the issue. This structure has been used effectively on a number of deals arranged by Deutsche Bank, including the previous Banksia 2001-1.