Commonwealth Bank securitises A$15.6bn of home loans

8 May 2008

Commonwealth Bank Group has created a portfolio of A$15.6 billion of residential mortgage-backed securities (RMBS) through its Medallion Trust. These RMBS will be held by the Group and if required, the Class A notes can be used for repurchase agreements with the Reserve Bank of Australia (RBA) to generate up to an additional $12.25 billion of liquidity for the Group.

The assets of the Trust comprise fixed and variable interest rate mortgage loans originated from the Group’s home loan portfolio and from the portfolio of Homepath Pty Limited, a wholly owned subsidiary.

The deal consists of three tranches.

  • Class A of AUD A$ 14,974,000,000
  • Class B of AUD A$ 103,000,000
  • Class C of AUD A$ 577,600,000

The Class A notes are expected to be rated AAA by Fitch. The Class B notes are expected to be rated AA by Fitch, the Class C notes are unrated.

Transaction Details

  • Commonwealth Bank will continue as Servicer of the loans. Securitisation Advisory Services Pty Ltd, a wholly owned subsidiary of the Bank, will be the Manager of the Trust.
  • The Group will also provide a A$250 m liquidity facility and act as the interest rate hedge provider.
  • The trustee of Medallion Trust Series 2008-1R is BNY Trust Company of Australia Limited.
  • Structural enhancements include mortgage insurance policies for loans above 80% LVR with Genworth Financial Mortgage Insurance Pty Ltd.
  • The notes are sequential pay. Principal repayments will be allocated to Class A first until fully paid then Class B until fully paid, followed by Class C notes.
  • The structure has a 10 year substitution period which allows the Bank to add more home loans to the trust.

For further information

Bryan Fitzgerald
General Manager, Media and Issues Management
Commonwealth Bank
Tel (02) 9378 2663
Mob: 0414 789 649