Financial Times FT.com

New lease of life for mortgage-backed bonds

By Peter Smith in Sydney

Published: May 16 2008 18:06 | Last updated: May 16 2008 18:06

The Australian mortgage-backed bond market, which shut down last year in response to the global credit crisis, is showing tentative signs of life after Citibank raised A$500m (£243.8m).

However, the US bank, which owns a domestic mortgage business in Australia, had to offer investors in the triple A-rated notes a record high yield margin of 145 basis points above the Australian benchmark back bill swap rate (BBSW).

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