1. Commonwealth Bank of Australia. Medallion Program. Leanne Leong. General
Manager Structured Finance. May 2007 ...
Commonwealth Bank of Australia Medallion Program Leanne Leong General Manager Structured Finance May 2007
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Medallion Trust: Issuance History Residential Mortgage Backed Securities The total issuance to date, under the Medallion Program is over A$34 bn Annual multi-currency global issuance SEC Shelf Filing Series 2007-1G Medallion Trust A$7bn closed on February 27, 2007 USD, EUR and AUD multicurrency issuance CBA’s 10th SEC registered deal
Asset Backed Securities Series 2003-1 Medallion $2.5bn SME Credit Linked Trust Reference portfolio comprised of secured loans to small and medium sized businesses (SMEs) Exposure secured by commercial and residential real estate
Series 1999-1 Medallion $1.5bn Credit Linked Trust 100 Corporate credit exposure Access to Australian corporate exposure – rated and non-rated
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Why Securitise? Securitisation adds funding diversity and flexibility
CBA’s Funding Mix
Funding Objectives: Real time access to capital markets Diversified Funding sources Broad investor base
Wholesale, 44.8%
Minimise cost of wholesale funding
Retail, 55.2%
Securitisation accounts for 7% of CBA’s wholesale funding portfolio, with $16.8bn outstanding as at 31st March 2007
Source: CBA Company data
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Why Securitise? (Cont’) Rating Agencies Assessment Liquidity Management “The bank's mortgage book provides an alternate source of liquidity through the bank's regular RMBS issuance, which typically attracts strong investor appetite.”
Moody’s Investors Service December 2006
“The Bank is supported by sound liquidity management conventions and by a portfolio of cash and money market, and other readily marketable securities. A strong securitization capability has also supported the bank's liquidity management capability.”
Standard and Poor’s June 06
Diversified Funding “CBA's regular issuance also performs a broader market-building role, effectively facilitating access for other Australian institutions to international securitisation markets.” Moody’s Investors Service December 2006
“CBA's funding ability is substantial, and is supported by the bank's position as the largest retail deposit raiser in the Australian market, and the bank's considerable access to domestic and international wholesale markets. The bank's funding platform is supplemented by a well-developed and utilized securitization capability.” Standard and Poor’s June 06
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Why Securitise? (Cont’)
Adds Capital Management flexibility
Manage economic risk and concentration risk transfer
92% Senior Tranche(s) retained by CBA
Absorption of losses
0.76% Class A Notes - A+/A1 2.90% Class B Notes - A-/A3 2.0% Class C Notes - BBB/Baa2 0.48 % Class D Notes - BBB/Baa3 0.96% Class E Notes - BB/Ba2 0.90% threshold First loss provided by excess spread - 1.1% pa 5
