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ING primed for A$750m RMBS return

By Rev Hui
29 Sep 2015

ING is making a return to the Australian RMBS market with its well-established IDOL series, which is expected to free up A$750m ($526m) for the Dutch lender.

The bank’s IDOL RMBS is considered one of the most well-established programmes in Australian securitization, according to Moody's. This is thanks to ING having tapped the market at least once a year since 2010.

Its latest deal, the IDOL2015-1, is split into six tranches – A, AB, B, C, D, E – and the bank is expected to only sell a A$690m senior portion as well as a A$28.3m mezzanine AB piece.

The lender plans to include 2,363 residential loans as collateral and a Moody’s pre-sale report said the asset pool is evenly balanced with the top 20 borrowers representing just 2.51% of the pool.

Meanwhile, the geographical distribution of the loans is also very spread out with the biggest region – New South Wales – representing close to 40% of the loans.

Citi’s recent A$1.2bn Securitized Australian Mortgage Trust (SAMT) 2015-1, for example, is far more concentrated, with half of its loans coming from the same region. 

But those were not the only characteristics Moody’s found appealing with ING's transaction. The ratings agency pointed out that all the loans were originated with full income verification – a huge plus when it comes to the quality of the debt.

In addition, investment and interest-only loans are also well below the market averages, coming in at just 18.6% and 18.3%, respectively, compared to the industry average of 39.6% and 40%. As a result, the ratings agency has rated the senior tranche AAA (sf).

Among the loans collateralized, 74.8% are variable and the remaining fixed. They have an average loan size of A$317,393, slightly higher than the A$282,779 for IDOL 2014-1, although the weighted average seasoning is also much lower at just 18.9 months compared to 27.3 months previously.

By Rev Hui
29 Sep 2015