ING Boosts Australia Mortgage Bonds to Record as Home Sales Rise
ING Groep NV (INGA)’s Australian unit has priced a sale of mortgage-backed bonds, boosting the bank’s annual issuance to the highest on record as home sales rise.
ING Bank Australia Ltd. issued A$1 billion ($904 million) of notes backed by home loans, bringing offerings in 2013 to A$2 billion, according to data compiled by Bloomberg. The lender has sold 11 percent more residential mortgage-backed securities than in 2012, previously its busiest year, the data show.
Commonwealth Bank of Australia (CBA) last week sold the nation’s largest offering of mortgage-backed bonds since the financial crisis as record-low benchmark rates fuel home purchases. The central bank has cut interest rates eight times since late 2011, lifting sales of dwellings in June to the highest since November of that year, industry data show.
“We’re reasonably upbeat on the housing sector,” said Gavin Goodhand, who helps oversee A$500 million at Altius Asset Management Pty in Sydney. “We like mortgage-backed securities as an asset class. Arrears have continued to be low, which is a function of the housing market doing well.”
Altius didn’t buy today’s transaction because it already holds previously issued ING mortgage bonds in its portfolio, Goodhand said.
ING priced A$920 million of bonds with a 2.9-year weighted average life at 100 basis points more than swaps, and A$30 million of AB Class notes with a 5.6-year average life at 165 basis points more than the benchmark, data compiled by Bloomberg show.
The company retained a further A$25 million of AC notes and A$25 million of B notes, a person familiar with the matter said, asking not to be identified because the details are private.
The sale, which was the issuer’s seventh, attracted 20 investors, according to an e-mailed company statement.
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