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Securitisation market recovering

Securitisation market recovering

(21 May 2008 – Australia) A securitisation by Citigroup that was three times over subscribed is a sign that the securitisation market is on the road to recovery. Citigroup has completed a Securitised Australian Mortgage Trust to the value of A$500 million.

The securitisation was three times over subscribed and supported by 21 local and overseas investors, including a quarter of investment from international sources.

The deal is a sign of recovery from the problems resulting from the credit crunch, as the first residential-mortgage-backed securities deal undertaken since last December.

It is also a sign that the mortgage markets may have the chance to grow, because a healthy securitisation market will enable institutions to shift mortgages off their books and increase new lending.

Roy Gori, the chief executive of the consumer business for Citibank in Australia said that the strong interest for this securitisation program from a broad range of investors is a sign that credit markets are beginning to clear.

The notes are backed by Australian-denominated standard variable and line of credit residential mortgage loans secured by a first-ranking charge over Australian residential real property.

The class A notes had a weighted average life of 2.94 years and were priced at 145 basis points above the one-month bank bill swap rate of 7.57 per cent.
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