Series 2005-1 Reds Trust A$700 million mortgage backed securitisation issue launches today

04 February 2005

Macquarie Debt Markets announced today that Bank of Queensland’s REDS MBS Programme has launched a A$700 million residential mortgage backed securitisation issue. This is the 13th issue of the very successful REDS MBS programme.

Macquarie is the Arranger for the transaction. Macquarie and ABN AMRO Bank N.V., Australian Branch, are the Joint Lead Managers.

As with previous issues, Bank of Queensland is the originator and servicer of the mortgage portfolio. The trustee of the Series 2005-1 REDS Trust, Perpetual Trustee Company Limited, is the issuer of the mortgage backed securities. Moody’s Investors Service and Standard & Poor’s will each assign ratings to the issued securities.

As at 1 February 2005, the mortgage portfolio had the following characteristics:

Total portfolio value A$698,698,939.40
Average loan size A$182,000.24
Weighted average current LVR 64.20%
Number of loans 3,839
Weighted average seasoning 12.2 months

The Series 2005-1 REDS Trust issue comprises the following securities, each with a Final Maturity Date of 12 April 2036:

Class Indicative S&P Rating Indicative Moody's Rating $m Expected Average Life @ 29% CPR (Yrs)
A-1 AAA Aaa TBA* 2.56
A-2 AAA Aaa TBA* 2.56
B AA Aa2 21 4.25
Total     700  

* The Class A-1 and A-2 Notes will total A$679m in aggregate. The respective breakdown between Class A-1 and A-2 Notes will be determined on the pricing date pursuant to investor demand.

The issue includes an innovative feature in offering investors in the AAA/Aaa Class A Notes the option of buying Australian dollar denominated securities with a floating rate of interest benchmarked either to BBSW (set in Australia) in the Class A-1 Notes or AUD LIBOR BBA (set in London) in the Class A-2 Notes. This structural feature is attractive to a number of offshore investors who prefer a London rate set, thereby increasing the potential investor base for the issue.

Mr Kevin Lee, Division Director Debt Finance, at Macquarie said: “We are pleased to be acting as Arranger and Joint Lead Manager for the 13th issue from the REDS MBS programme. As a well established and consistent issuer we expect the issue to be widely supported by investors. Particularly attractive features of the underlying mortgage portfolio include a bank originated and serviced portfolio, zero low documentation loans and a low proportion of investor loans.

“The transaction has also been conservatively structured with a level of subordination, which is sufficient to ensure that the AAA/Aaa ratings of the Class A Notes would survive even if each of the mortgage insurers were to be downgraded by one ratings category by Standard & Poor’s and two ratings notches by Moody’s,” said Mr Lee.

The issue is expected to price on or before 14 February 2005 and settle on 17 February 2005.

For further information, please contact:

Kevin Lee
Division Director, Debt Markets
Macquarie Bank Limited
Tel: (612) 8232 8577
Mobile: (614) 0485 7206

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532

Contact us

Please email us for all media enquiries