Government pumps $500m into Members Equity
Thursday, 30 October 2008 12:35pm
Industry Super Fund-owned Members Equity Bank has received a $500 million injection following the Federal Government's Australian Office of Financial Management's investment in its super members' home loans RMBS.
In a media statement released by MEB yesterday, the bank confirmed the AOFM invested $500 million into its AAA- rated Super Members Home Loans (SMHL) Securitisation Fund Residential Mortgage-Backed Securities (RMBS).
MEB's chief financial officer Nicholas Vamvakas said the AOFM elected SMHL's A1 and A2 Bonds as part of its initial offering.
Vamvakas views the investment as a welcoming move and a positive step towards encouraging positive investor sentiment back into the wholesale credit market.
"We appreciate the Federal Government's efforts to 'unfreeze' the wholesale credit market and to ensure equal access to funding by all financial institutions in Australia," he said.
"Up to $20 million of the $500 million (or 2 per cent of the total issue) may be in the A2
Bonds, with the remainder in A1 Bonds."
Last month the Government announced the AOFM would purchase $4 billion in RMBS in Authorised Deposit-Taking Institutions.
Just last week, the Government directed the AOFM to invest a further $4 Billion in non-ADI institutions.
"This program of steps will ensure that Members Equity Bank continues to offer its members low cost, transparent, simple and best value products," claims MEB.
Ruth Liew
