rams has refinanced, page-21

RAMS Home Loans to offer A$250m RMBS
By Reuters Sept 26 03:51:55

Australian mortgage lender RAMS Home Loans Group Ltd is planning a A$250m ($219m) residential mortgage-backed securities (RMBS) issue, in a sign issuers are slowly returning to troubled debt markets.

RAMS shares extended gains to rise as much as 8 per cent to A$1.025 on the news, in a flat overall market.

RAMS, which listed on the Australia stock market in July, failed to refinance A$6.17bn in debt last month as liquidity in credit markets dried up as part of the fallout from the U.S. subprime crisis.

RAMS shares tumbled, and remain some 60 per cent below their initial public offer price of A$2.50.

Moody’s Investors Services said RAMS would start marketing the offer on Wednesday.

The issue would make it only the second such offer since the the credit turmoil surfaced in July. Last week, a unit of Macquarie Bank Ltd securitised A$500m RMBS.

Importantly, RAMS will be the first non-bank lender to issue RMBS since the start of the credit crunch, and the issue will be a test of investors’ fragile appetite for corporate debt in Australia.

”This is the second transaction brought to the Australian market within the space of a week, which is a positive sign for the industry,” said Standard and Poor’s credit analyst Fiona Otway in a report.

Like other non-bank lenders, RAMS used to borrow money in the short-term commercial paper market and lend home buyers for a longer duration. But the credit market turmoil pushed up borrowing costs and virtually shut down the commercial paper market.

The new issue, called RAMS Mortgage Securities Trust Series 2007-3, will have three tranches.

The sharp fall in RAMS share price has spurred speculation about a possible takeover, helping RAMS shares to recoup some of the losses.

A RAMS spokeswoman declined to comment on Wednesday on the market talk