RMBS Auction Update

8 November 2017

On 5 February 2016, the AOFM announced the suspension of RMBS auctions until further notice.

In accordance with the Treasurer’s Direction of 5 May 2015 the AOFM has determined that RMBS market conditions have improved sufficiently to warrant restarting the RMBS divestment process through regular auctions.

The AOFM undertook to provide no less than two weeks’ notice of its intention to restart RMBS auctions. The first such auction will be held on Thursday November 23rd. The AOFM will release the details of this auction shortly.

The auction process is largely the same as that announced in June 2015, here:

http://aofm.gov.au/operational-notice/rmbs-divestment-process/

Based in part on feedback received regarding previous auctions, there are three important changes to the process going forward:

1. The AOFM will now disclose a reserve price at the time each auction is announced, expressed in terms of the clean price per $100 face value;

2. The AOFM will no longer provide notice of the forward pipeline of its specific divestment intentions, but will provide at least two weeks’ notice of each auction; and

3. The amount sold will be the amount offered, subject to a sufficient volume of bids being received at prices that are not less than the relevant reserve price for each note.

There are no changes to the mechanics regarding the bid submission process.

Questions on the AOFM’s RMBS divestment process can be submitted to rmbsquestions@aofm.gov.au and it is the AOFM’s intention to publish both questions and answers on its website. The AOFM does not seek and nor will it receive non-public information about primary issuance of RMBS.

Last updated: 8 November 2017