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Implementation of a $15 billion fund to support business and consumer lending

 20 March 2020

  • The Government has announced that it will introduce legislation to establish a $15 billion fund and direct the AOFM to provide support for non-ADI and ADI lenders through securitisation markets.
  • Support will comprise direct investments in primary market securitisations and warehouses financing a broad range of lending in mortgage, consumer and business lending.
    • Acceptable underlying collateral will extend beyond residential mortgages, and will include asset backed financing and SME lending.
  • The AOFM will invest in rated term securitisations in the primary market and in rated and unrated financing of securitisation warehouses.
    • The AOFM will give preference to proposals that expand existing funding capacity.
  • The AOFM has worked with the RBA and Treasury to design a program to provide support primarily (but not exclusively) within the non-ADI market that complements the RBA’s recently announced Term Funding Facility.
    • The AOFM will work with ADI and non-ADI providers of warehouse finance to facilitate the flow of credit to smaller lenders.
  • More information will be released upon passage of the relevant legislation. The AOFM understands the urgency of this task.
  • The AOFM would like to acknowledge the assistance of the Australian Securitisation Forum in channelling useful information that has underpinned the AOFM’s deliberations.