Commonwealth Bank launches largest ever Australian Mortgage Securitisation

11 April 2001

The Commonwealth Bank Group has today priced its the third global issuance of mortgaged backed securities through Medallion Trust; its mortgage backed securities program. The A$2.9bn transaction is the largest ever securitisation of Australian Mortgages. The assets comprise fixed and variable rate loans originated from the Bank's home loan portfolio and from the portfolio of Colonial State Bank, a wholly owned subsidiary.

The deal is structured to include a Class A1 of US$1,100 million issued into the US and Euro markets which will be registered with the US SEC and listed on the London Stock Exchange. The A1 Notes are rated AAA/Aaa/AAA by Standard & Poor's, Moody's Investors Service and Fitch Inc, respectively and priced at a margin of 18.5 basis points over 3 month US LIBOR.

There are two senior tranches of AUD denominated notes, A$330 million of Class A2 Tranche 1 with an average life of 1.3 years which priced at a margin of 24 basis points over the 1 month Bank Bill rate, and A$255 million Class A2 Tranche 2 with an average life of 5.2 years which priced at 35 basis points over the 1 month Bank Bill rate. There is also A$39 million of Class B subordinated notes. The AUD denominated tranches have been sold into the Australian market.

This deal follows the two successful issues during 2000 under the Medallion program into the global and domestic markets, bringing the total issuance over that period to nearly A$7bn.

Leanne Leong, Head of Securitisation at Commonwealth Bank, said "The Series 2001-1G Medallion issue further confirms the Group's commitment to regular issuance in the global market through the Medallion Program. This is our third and largest transaction in just over 12 months and we have once again been very pleased with the reception we have received from new investors from both Europe and the U.S. The flexibility provided by this structure enables the Bank to target investor demand in both the global and domestic markets and we are also very pleased with the strong interest from Australian investors in the domestic leg of the transaction."

Salomon Smith Barney was the lead manager for the A-1 Notes with the Commonwealth Bank, Credit Suisse First Boston, Deutsche Bank and JP Morgan as co-managers. The domestic issue was lead managed by Commonwealth Bank with Warburg Dillion Read Australia and Macquarie Bank as co-managers.