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FIGCovered Bonds

Aussie collateral “improves” following further house price rises

The improving quality of the mortgages which back Australian covered bonds means they require less collateral than in the past to sustain a top rating, said Moody’s in a report on Wednesday. The assessment comes a few days after Fitch’s quarterly overview, which showed a sustained increase in investment mortgage lending. — But this higher risk lending is correlated to Australian house price growth which, since the year 2000, has exceeded both Spanish and Irish house price growth, according to data from The Economist.

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