Australia's Suncorp to sell A$1.2 bln RMBS-S&P

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SYDNEY, Aug 11 (Reuters) - Australian insurance and banking
group Suncorp-Metway (SUN.AX) plans to sell A$1.2 billion ($1
billion) in prime residential mortgage-backed securities,
ratings agency Standard & Poor's said on Tuesday.

The Australian government said last month it would buy some
of the offer as part of its A$8 billion ($6.7 billion) RMBS
purchase plan announced last year to inject much-needed
liquidity into the home loan market.

Suncorp's issue, to be called Apollo Series 2009-1 Trust
Prime RMBS, offers four tranches and is expected to price
around Aug. 21, a source who has seen the terms said.

The source asked not to be named because he is not
authorised to speak to the media.

Macquarie Bank and Royal Bank of Scotland are jointly
leading the issue following investor discussions that kick off
this week, the source said.

The issue pool includes loans with an average loan-to-value
ratio of 68 percent and an average time since issue, or
seasoning, of 37 months. All the loans are fully insured.

So far, the government has invested A$6.7 billion as a
keystone investor in RMBS. Yet the Australian RMBS market
remains a shadow of its former self with almost no issuance
without the government's support.

Small lenders have suffered greatly since the U.S. subprime
mortgage crisis because they are reliant on the now-moribund
securitisation market to fund their operations.

The government said it would also invest in a new RMBS
offer by local mortgage lender Great Building Society, expected
to price by late August.

Deal details are as follows:

Class Amount AVERAGE LIFE RATINGS

(mln) (years) S&P/Fitch

A1 A$90 0.17 A1-1+/F1+

A2 A$300 0.81 AAA/AAA

A3 A$690 3.62 AAA/AAA

B A$120 7.83 AA-/AA-
($1=1.199 Australian Dollar)
(Reporting by Cecile Lefort)