|
St.George to stay out of term market after A$1 billion RMBS |
St.George Bank (A+/Aa2/A+) (St.George) says it does not expect to return to the term funding markets in the near term after selling A$1 billion (US$849.7 million) of RMBS securities under its Crusade securitisation programme in a private placement on September 1.
The bank has now funded A$4.6 billion for its 2009 financial year – which begins in September – having finished 2008 funding three months early, in June this year. This means St.George has pre-funded 40 per cent of its requirement for next year, and managing director and CEO Paul Fegan says: “Given this advanced position, we do not see the need to raise any substantial new term funding in the near future.”
He continues: “We were one of the first of the Australian banks to complete funding for the 2008 financial year, and currently have a large proportion of next year’s requirements already locked away. Since 1 October 2007, St.George has raised a total $12.6 billion of committed term funding. In addition, we continue to see strong growth in retail deposit balances with growth of 18.9% annualised for the ten months ended 31 July 2008.”
It has been suggested that St.George is benefiting from an anticipated credit rating boost when its merger with Westpac Banking Corporation is completed. One investor comments: “When you look at St.George at the moment you do of course consider the likely impact of the Westpac deal, but on the other hand you can’t take the completion for granted. Market conditions suggest not many investors will feel comfortable playing merger arbitrage.”
The Crusade Trust No 1 2008 transaction is split into two tranches. The A$1 billion senior tranche – which the issuer expects to receive a triple-A rating from Standard & Poor’s – was privately placed, with St.George declining to provide pricing details other than to say it was “competitive with comparable sources of funding available to Australian banks”. There is also a A$51.3 million subordinated tranche which St.George retains.
|
|
Last Updated ( Tuesday, 02 September 2008 )
|
