Overview of securitisation
Securitisation involves creating debt securities directly out of cashflows from specific assets such as home loans or corporate loans.
We use securitisation for funding, capital and credit portfolio management.
You can access up-to-date performance information here for the benchmark Medallion and Swan securitisation programs as well as similar details for the former Colonial Bank’s CATS and Goldstar transactions.
Securitisation is used by the Bank for funding, capital and credit portfolio management. The Medallion Trust Program was established by the Commonwealth Bank of Australia in October 1997 to enable the securitisation of its own assets. The Medallion Master Trust Deed provides for the establishment of an unlimited number of trusts. Each series trust is separate and distinct from any other trust established and the assets of each are not available to meet the liabilities of any other series trust.
Since 2000, the Commonwealth Bank’s mergers and acquisitions with Colonial State Bank and Bank of Western Australia have led to the Commonwealth Bank Group companies administering CATS, Goldstar and Swan RMBS transactions. Commonwealth Bank has also executed a range of other Asset Backed Commercial Paper and Credit Linked Note transactions via its Prime Investment Entity and SHIELD securitisation platforms. CBA acquired Bank of Western Australia in December 2008.
October 1997: The Commonwealth Bank's first residential mortgage-backed securitisation transaction was issued in the domestic market with the launch of Series 1997-1 Medallion Trust. The total amount issued was A$277.2million.
October 1998: The following year the Series 1998-1 Medallion Trust was executed with the total issued into the domestic market of A$303 million. The underlying assets were sourced from both Commonwealth Bank of Australia, and Homepath – a fully owned subsidiary of the Commonwealth Bank.
July 1999: The Commonwealth Bank became the first Australian bank to execute a credit linked note transaction in the form of its $1.5billion Series 1999-1 Medallion Credit Linked Trust, which securitised Australian and offshore corporate credit exposures. The rationale for this transaction was active credit portfolio management.
March 2000: The Bank established its global residential mortgage backed securitisation (“RMBS”) program, becoming the first Australian issuer to launch a deal that included both a US$955million tranche issued into the offshore market and an A$165million tranche issued domestically. This deal was named Medallion Trust Series 2000-1G.
September 2000: In the same year Medallion Trust Series 2000-2G was executed. This deal included US$1.0602 billion issued offshore and A$427 million issued domestically.
March 2001: The Bank issued its third global residential mortgage backed transaction. At the time, this was the largest single non-government offshore raising in the history of the Australian capital markets. The deal included US$1.1billion issued offshore and A$624million issued domestically.
January 2002: The evolution of the Bank’s global securitisation program continued with the establishment of a shelf filing with the US Security Exchange Commission.
November 2003: The Bank executed a second credit-linked note securitisation of loans to small and medium entities secured by mortgages over residential and commercial property via the Series 2003-1 SME Credit Linked Trust.
March 2006: The Bank executed a A$5.5 billion mortgage backed transaction establishing seven new Australian benchmarks, including being the first non-US mortgage backed deal to meet the newly introduced SEC Regulation AB.
February 2007: The Bank issued a A$7 billion triple currency mortgage backed transaction which stands as Australia’s largest securitisation transaction and largest bond issue.
March 2010: The Bank issued a A$620m mortgage backed transaction called Swan 2010-1 from Bank of Western Australia, a wholly owned subsidiary acquired in December 2008.
November 2010: The Bank issued a A$1bn mortgage backed transaction called Swan 2010-2 from Bank of Western Australia. The deal included the first Fixed Rate Soft Bullet RMBS tranche since 2004 which was included in the UBS Composite Bond Index.
May 2011: Medallion 2011-1 was executed with the total issued of A$3bn. This was the first Medallion transaction executed since 2007, and was the largest Australian RMBS issued since 2007. The transaction included a Fixed Rate Soft Bullet RMBS tranche included in the UBS Composite Bond Index and was compliant with CRD2 Article 122a.