Divestment of RMBS Portfolio and Investment Panel

13 May 2015

The Treasurer has recently issued the AOFM with a Direction to divest the Australian Government’s investments in residential mortgage-backed securities (RMBS). The Treasurer’s direction can be found on the AOFM website.

The AOFM will be mindful of the potential for the divestment program to impact the RMBS market. Subject to market conditions, the AOFM expects to sell $300-500 million of RMBS per calendar month (based on the total amortised face value of notes to be sold, which will exclude accrued interest, gains on disposal and repaid capital). As of today, the AOFM’s holdings in RMBS are circa $4.6 billion, in amortised face value terms.

The AOFM plans to conduct the first monthly auction in June 2015. The specific timing and securities to be offered will be announced at least one week prior to each auction. The auctions are unlikely to be held on the same date of each month, so as to avoid potential complications arising from ex-coupon periods.

The AOFM is now inviting counterparties from the Investment Facility Panel Member List to register for participation in the RMBS auction process. Registrations of interest are to be sent by email to rmbs@aofm.gov.au by cob Thursday 28 May. This email should be limited to a letter signed by an authorised signatory of the panel member that (i) registers an interest in participating in the auction process, (ii) lists the names and contact details (including email addresses) of employees who will be authorised to submit bids on behalf of the panel member and (iii) states the name of the legal entity (or entities, where multiple legal entities appear on the Investment Facility Panel Member List) on whose behalf these employees are authorised to submit bids.

No fees will be paid by the AOFM to panel members for participating in the auction process.

Further information will be made available to the market on the specifics of the auction process in early June.

 


APPENDIX

AOFM Investment Facility – Panel Member List
(As at 24 June 2014)

  • Australia and New Zealand Banking Group Limited
  • Bank of Scotland PLC Australia Branch
  • Bank of Tokyo-Mitsubishi UFJ Ltd
  • Barclays Bank PLC
  • BNP Paribas
  • Citibank NA
  • Citigroup Pty Ltd
  • Commonwealth Bank of Australia
  • Credit Suisse
  • Deutsche Bank AG Sydney Branch
  • FIIG Securities Limited
  • HSBC Bank Australia Limited
  • The Hongkong and Shanghai Banking Corporation Limited Australia Branch
  • ING Bank Australia Limited
  • ING Bank NV Sydney Branch
  • J.P Morgan Australia Limited
  • J.P Morgan Chase Bank N.A
  • Laminar Capital Pty Ltd
  • Macquarie Bank Limited
  • Mizuho Corporate Bank Ltd, Sydney Branch
  • National Australia Bank Limited
  • Nomura Australia Limited
  • Royal Bank of Canada
  • Societe Generale Australia Branch
  • Sumitomo Mitsui Banking Corporation Sydney Branch
  • Suncorp-Metway Ltd
  • The Royal Bank of Scotland N.V., Australia Branch
  • The Royal Bank of Scotland PLC Australia Branch
  • Toronto-Dominion Australia Limited
  • UBS A.G. Australia Branch
  • Westpac Banking Corporation

Last updated: 13 May 2015