Queensland-based Suncorp Group has advised that a $120 million residential mortgage bond may not be able to repay all investors. The bond’s distributions have been thrown into doubt because the proportion of borrowers in arrears had reached a ‘trigger’ point. The bond dates back to 2010, so borrowers have been meeting mortgage repayments for almost 10 years. CLSA banking analyst Brian Johnson says it is unusual for a securitisation of such age to “go bust”. From The Australian:
CLSA banking analyst Brian Johnson pointed to a combination of borrowers carrying too much debt and rising arrears rates in states such as Western Australia, where unemployment has increased at the same time house prices have fallen, as a possible reason for the announcement.
