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Securitisation market participants have come out broadly in favour of the September 26 announcement by the commonwealth treasury that Australian Office of Financial Management (AOFM) will buy A$4 billion (US$3.19 billion) of mortgage-backed assets, though doubts remain regarding how the plan will be put into action and its overall efficacy.

Political progress on the exemption of semi-government bonds from interest withholding tax (IWT) was a central topic of discussion as Commonwealth Bank of Australia (CommBank) and Queensland Treasury Corporation (QTC) brought Australian state treasuries and government treasuries from both Australia and New Zealand together with international investors in Australia on September 24-27.

Municipality Finance (AAA/Aaa) (MuniFin) doubled the size of its only outstanding Kauri bond, the 2011, on September 23, adding NZ$100 million (US$68.81 million) to its size in a transaction that launched and priced in a day to reduce the impact of volatile markets.

The Challenger Millennium Series 2008-1 Trust RMBS deal priced on September 19, riding out heightened market volatility since its opening a week previously and even upsizing slightly, to A$440.8 million (US$355.11 million) from its indicative A$400 million. The transaction was led by nabCapital, Royal Bank of Scotland Australia and Barclays Capital.

The status of deals open in the Australian and New Zealand markets has been put under scrutiny as Westpac New Zealand (AA/Aa2) (Westpac) postponed the five-year domestic deal it launched on September 8, citing the ongoing uncertainty in global markets.

The European company for the financing of railroad rolling stock, EUROFIMA (AAA/Aaa), will roadshow to Australian and New Zealand investors towards the end of October. TD Securities is arranging the roadshow, which starts in Sydney on October 21.

Macquarie Group has strongly denied a newspaper report in Australia saying it is likely to struggle to meet its refinancing requirements over the next six months. The bank claims in an Australian Securities Exchange (ASX) announcement that the claims are inaccurate and were made without giving Macquarie right of reply.

Lehman Brothers’ Kangaroo bond was removed from UBS indices in Australia on September 17 following Standard & Poor’s downgrading of the issuing entity, Lehman Brothers Treasury, to D. This is the first example of a Kangaroo bond entering default.

The financial institutions (FIs) closest to the most recent wave of market turmoil have just short of A$10 billion (US$8.01 billion) outstanding in the Kangaroo market with almost A$7 billion also borrowed by HBOS through its Bank of Scotland Australia subsidiary.

Queensland Treasury Corporation (AAA/Aaa/AAA) (QTC) priced a NZ$175 million (US$114.56 million) increase to its 2017 Kauri bond on September 12. However, a negative trend in the New Zealand basis continues to make conditions difficult for offshore issuers outside Australia.

Kommunalbanken Norway (AAA/Aaa) (KBN) will be roadshowing in Australia and New Zealand the week beginning September 22.  Thomas Møller, executive vice president and chief financial officer at KBN in Oslo, confirms that RBC Capital Markets will be hosting the Australian leg of the roadshow, while ANZ is arranging the meetings in New Zealand.

Two of the three Australian banks with offshore-based bond originators have made changes to their teams in the last few months, meaning that by the start of 2009 National Australia Bank (NAB) will be the only Australian bank with a full-time originator based in New York.