From Banking Day:
The Australian Office of Financial Management has completed its third auction of residential mortgage-backed securities, accepting bids for A$122 million of the $500 million of securities on offer.
It was another disappointment for the AOFM, which has sold $378 million of its RMBS holdings after putting $1.5 billion worth of securities up for sale in three auctions since June.
In the latest sale the AOFM accepted bids on only three of the eight note series on offer – Barton 2011-1, Illawarra 2010-1 and SMHL 2008-2.
From the outset it seemed that either the AOFM’s (and the Government’s) price expectations were too high or bidders wanted too much of a bargain. Not much appears to have changed over the three months since the program began.
Following this latest auction, the AOFM said that until further notice it would offer between $350 million and $400 million for sale at each auction.
With so much government guaranteed major bank debt around the place who would want this free market schlock?
