29 September 2008
Arrangements for the Purchase of Residential Mortgage-Backed Securities
On 26 September 2008 the Treasurer announced that the AOFM will purchase residential mortgage backed securities (RMBS) to support competition in Australia's mortgage markets. The AOFM will hold two initial tenders for AAA rated RMBS, each of $2 billion.
The AOFM will consult with RMBS issuers on the details of the tender arrangements and the specification of eligible RMBS securities. Consultations will commence this week with a view to an early announcement of the tender processes and requirements.
Issuers will be invited to notify their interest when the detailed requirements have been announced. Reasonable time will then be allowed for issuers to prepare proposals and submit documentation for assessment of eligibility. A reverse tender process will then be conducted to select the successful offers.
It is expected that the pricing and settlement of the first tender will be completed by December. A second tender will then be conducted in early 2009.