Is Citigroup Inc (NYSE:C) Ready To Venture In to Mortgage-Bond Transaction Again In Australia?

Boston, MA 10/14/2014 (wallstreetpr) – In Australia, its central bank initiated stimulus to boost its housing market. This naturally attracts every financial institution operating in Australia to take advantage of it and get a slice of its share. Therefore, it is no surprise that Citigroup Inc (NYSE:C) wants to explore the possibility of earning its share in the available opportunities.

Meeting Arranged

The company’s division in Australia seems to be pondering over the idea of indulging in mortgage-bond transaction for the first time in over three years, Bloomberg reported. For this, it has arranged meetings next week with investors. This should likely pave the way for the issue of residential mortgage-backed securities to the residents in Australia.

Citigroup completed only one Australian mortgage-bond transaction after the worldwide financial turmoil in 2008. That was in April 2011 and priced its A$760 million of notes. Citigroup Inc (NYSE:C) priced its top class notes at a spread of 115 basis points.

Citigroup Inc (NYSE:C) would join other home-loan lenders if it starts selling in Australia. Others already in the field included Macquarie Group Ltd., Firstmac Ltd., and Pepper Home Loans Pty. The housing market was looking favorable as the prices reached record highs.

The last major bank to come up with mortgage-backed securities was Commonwealth Bank of Australia or CBA in August. It came out with $3.5 billion or Australian $4 billion deal.

Analyst Take

Westpac Banking Corp.’s Head for asset-based securities strategy, Martin Jacques, believes that the time is ripe for Citigroup Inc (NYSE:C) to enter the market since it offered potential. He said that it has been for a while for them to be in the market. He said that it could not see any residential mortgage-backed securities from any authorized deposit-taking financial institution after CBA. Its August deal was comparatively cheaper at a spread of 70 basis points higher than the bank-bill swap rate while its February deal was 80 basis points more than the bank-bill swap rate.

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Published by Donna Fago

I believe in writing content Informing investors with the knowledge they need to invest better today- I have been following the markets for many years and was asked to join the team at WallStreetPR.com recently due to my passion for the markets.

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