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Commonwealth Bank Plans to Sell Mortgage-Backed Bonds This Week

Commonwealth Bank of Australia is marketing A$750 million ($790 million) of residential mortgage-backed securities, in the first sale of such bonds by the nation’s biggest lender in more than a year.

The offering will be completed by Aug. 3 and includes A$690 million of notes that may yield 140 basis points to 145 basis points more than the one-month bank bill swap rate, Steve Batten, a Sydney-based spokesman, said by e-mail today, confirming details given to Bloomberg by a person familiar with the matter. Standard & Poor’s gave the securities a preliminary rating of AAA, according to an e-mailed report.

Sydney-based Commonwealth Bank is selling its first RMBS since April 2011, when it returned to the market after a four year absence, according to data compiled by Bloomberg. The lender has raised the equivalent of 9.8 billion euros ($12 billion) this year from covered bonds, a different type of debt that’s also backed by home loans, after the government passed legislation in October allowing the sale of such notes.

The main class of notes in Commonwealth Bank’s sale last year were priced to yield 95 basis points more than BBSW, Bloomberg data show. Bank of Western Australia Ltd., a unit of Commonwealth Bank, sold A$500 million of RMBS in October 2011, the data show.

Commonwealth Bank is the lead arranger for this week’s sale and Macquarie Group Ltd.’s banking unit is a co-manager, Batten confirmed. The lender is also inviting inquiries from investors regarding A$45 million of AA- rated bonds, and A$15 million of unrated debt.

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