I welcome the first two investments by the Australia Office of Financial Management (AOFM) in Residential Mortgage Backed Securities (RMBS) under the Government's initiative to invest $8 billion in RMBS.
These investments are part of the Government's commitment to strong and effective competition in Australia's mortgage markets.
The Rudd Government is committed to ensuring that Australia's financial system provides Australian households with a wide range of financial products at competitive prices.
In September I announced that the Government would invest in RMBS to support competition in lending for housing. The first two such investments have now been agreed and priced.
The completion of these two issues will help reinvigorate the RMBS market in Australia and contribute to competition in home lending.
I am particularly pleased that other investors have been encouraged to participate in them, thereby adding to the total funds that will be available for new housing mortgages.
Agreement was reached late on Friday for an issue of $600 million of RMBS by FirstMac Limited, with the ANZ Bank, HSBC and Macquarie Bank as arrangers.
Agreement was reached today for a second issue of RMBS, also of $600 million, by Members Equity Bank, with Westpac and Credit Suisse as arrangers.
The AOFM is participating in each as a cornerstone investor and is contributing around $500 million to each.
The AOFM has also announced today two further mandates that it is providing for additional RMBS issues.
These mandates are for issues by Challenger Mortgage Management and RESIMAC Limited. It is expected that these issues will be priced and placed during December.