NZF securitisation programme good news for NBDTs
The successful NZF securitisation programme has been welcomed by non-bank deposit takers, with new funding avenues good news for firms struggling to attract cash amid intense competition for deposits.
Tuesday, June 29th 2010, 11:47AM
by Paul McBeth
Last month, NZF Group successfully raised $100 million through the first launch of mortgage-backed securities in almost three years which it is using to subsidise its push into the lending market where it hopes to foot it with the major banks.
That is good news for the finance sector, according to Kirk Hope of the Financial Services Federation, who says the Reserve Bank's imposed core funding ratio for the major banks has kept pressure on deposit takers to keep rates high and made it more difficult to source funds from investors.
"Banks have been pushing hard to meet those ratios," Hope told depositrates.co.nz. "The demand for residential mortgage-backed securities is really good news for the market - it's been very slow for a long period of time, and more certainty is valuable to market participants."
Hope, whose members include the major finance companies such as South Canterbury Finance, Marac, and PGG Wrightson Finance, says though he has not heard of any new RMBS programmes, he would expect financial institutions that already have them in place to revisit them.
"Anyone big enough to have a securitisation programme will be looking very closely to see if investors have an appetite for RMBS products," he said.
Paul is a staff writer for Good Returns based in Wellington.
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