Categorized | International

Australian Mortgage Bonds Will Be Issued in Two Currencies

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In what many consider being an unprecedented move, National Australia Bank Ltd. has announced that it will issue bonds backed by residential mortgages in both the United States dollar, and the Australian dollar. The lender is preparing to sell the bond notes in two months, and will likely issue two hundred million United States dollars worth of bonds, and over five hundred and fifty million Australian dollars worth of bonds.

The move by National Australia Bank Ltd. is being done with the intentions of attracting a more diversified clientele of investors. Many Australian real estate and lending experts believe that the move could be a highly beneficial one, as basis standards have tightened in the recent weeks. Such tightening makes offshore issuance of bonds much more attractive to lenders and investors alike.

Under the slated issuance, those purchased United States dollar-backed bonds will be able to receive their principal no later than September of 2013 provided that they meet certain required conditions. Those purchasing Australian dollar-backed bonds will receive their principal once the actual underlying home loans are repaid. It is for that reason that many investors prefer the United States dollar-back loans.

Other lending firms may duplicate this most recent decision by National Australia Bank Ltd. in the near future. In fact, many of Australia’s largest lenders and banks have most recently decided to re-enter the mortgage bond market. Many of them left the market during the global recession and credit freeze. With restrictions on credit easing across the globe, these major Australian lenders have re-emerged.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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