Australian structured finance market to pick up in H2, says Moody's

International rating agency Moody's believes the Australian structured finance market will pick up in the second half of the year following a drop in such deals during the first six months of this year.

The volume of Australian structured finance securities issuance fell 3% to A$16 billion compared with the same period in 2001. Moody's said the tail-off was caused by a number of cross-border residential mortgage-backed securities (RMBS) deals that were marketed in Q2 not now being booked until Q3 this year."Even though only a small number of transactions have so far been completed, Moody's believes the non-conforming RMBS market shows healthy developments, with the supply boosted to A$591 million from A$127.5 million in the first half of 2001," said Patrick Eng, senior vice-president in Moody's structured finance group. Eng said Moody's expected more Australian RMBS issuers to seek global MBS issuance to expand their cross-border investor base beyond the traditional euro market.

He added that the property trust sector should continue to drive commercial mortgage-backed securities issuance, albeit in modest volumes, in the near term.

Future asset-backed securitisation growth should stem from a broadening of asset class deals, with auto and equipment leases, residential development project financing and lease payments securitisations from high credit quality tenants the most likely areas.