Bank of Queensland’s Series 2010-1 REDS Trust Upsized to A$850 Million

Tuesday, 09/02/2010

Bank of Queensland saw strong investor demand for the Series 2010-1 REDS Trust RMBS which resulted in the transaction being upsized from A$500 million to A$850 million. 

In total 20 investors, including the AOFM, participated in the deal which was placed with domestic investors.  The AOFM participated with an investment of A$250m in the Class A Notes. 

The transaction gained good momentum from the outset allowing for the over-subscribed book to be upsized and the Class A Notes to price at BBSW +1.30%.  The Class AB Notes were priced at BBSW +1.75% and the Class B Notes were privately placed.

David Liddy, Managing Director of Bank of Queensland, commented “We were very pleased to see a wide group of investors, 20 in all, participate in the first REDS transaction for 2010, which is a strong endorsement of Bank of Queensland’s franchise and solid collateral.”

“The Bank has been active in Government-Guaranteed term debt markets with the strategic goal of increasing our term debt maturity profile.  This deal shows a return to more traditional sources of funding for regional banks, as markets improve.”

According to John Claudianos, Head of New Issue, Credit Solutions Group at Deutsche Bank, “The Bank of Queensland story and high quality collateral saw another very successful and well distributed REDS RMBS transaction.  This transaction continues the run of prime Australian RMBS since the 4th quarter of 2009 with over A$5.0bn in RMBS transactions successfully placed in the market over this period”.

Deutsche Bank was the Arranger and Deutsche Bank, The Royal Bank of Scotland and Westpac were Joint Lead Managers.

Details of the transaction are as follows:-

  • Issue amount: A$850 million
  • Class A Notes (AAA/Aaa):  A$786 million (3.1yrs) BBSW +1.30%
  • Class AB Notes (AAA/n.r):  A$51 million (5.4yrs) BBSW +1.75%
  • Class B Notes (AA-/n.r):   A$13 million (5.4yrs) undisclosed pricing

Collateral Pool:-

  • Weighted Average LTV of 59%
  • 100% Mortgage Insurance
  • Weighted Average Seasoning of 28 mths
  • ASX Listed Senior Notes