Citi seen first Aussie RMBS issuer of '08-sources

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SYDNEY, May 9 (Reuters) - Citigroup (C.N) is likely to be
the first issuer of Australian residential mortgage-backed
securities (RMBS) in 2008, with pricing of a A$300
million-A$500 million ($283-$472 million) offer seen late next
week, market sources said.

Australia is still waiting for its first RMBS issue this
year after the U.S. subprime mortgage crisis which hit last
year sent borrowing costs soaring and saw the pipeline
completely dry up.

Among a number of RMBS issues being marketed to investors,
Citigroup's (C.N) is best placed to come first because of the
quality of its assets and the offer structure, sources said.

Preliminary pricing of Citi's planned triple A rated
2.7-year notes is seen at around 150 basis points over BBSW,
more than seven times what it paid on a similar issue before
the subprime crisis.

The offer, being led by Citigroup, is expected to price
late next week, a week later than initially anticipated,
according to an investor. The reschedule is due to
documentation delays, he added.

Sources say the offer is receiving good interest from
investors and expect the issue size to be close to A$500
million.

Citigroup declined to comment.

For more details on the RMBS structure, see [ID:nSYD72081].

The Australian unit of U.S.-based GMAC is still trying to
sell a A$303 million non-conforming RMBS debut despite its U.S.
parent company's financial setbacks, a portfolio manager said.

Pricing of the offer, which has been marketed to investors
for more than a month, is being sweetened to more than 300
basis points over BBSW from an initial 200 to 250 bp range.

Sole lead Westpac Institutional Bank declined to comment.

The spread widening, the investor said, is due to concerns
over the financial woes of U.S.-based Residential Capital LLC,
a unit of GMAC. See [ID:nN08426849] for more.

In addition, non-conforming RMBS issues are a particularly
hard sell in the current market conditions, investors said.

A third issuer, Macquarie Securitisation, a unit of
Macquarie Group (MQG.AX), has flagged its intention to sell an
RMBS with a pool of low-documentation loans, two investors said
on Friday. The offer structure has yet to be showed to
investors.

Macquarie declined to comment.

RAMS, Australia's first high profile victim of the subprime
crisis, has postponed a A$300 million equivalent RMBS issue
after meetings with investors in Europe were cancelled last
week, an portfolio manager said.

Preliminary pricing of the 2.5-year triple A rated notes
suggested a margin above 150 basis points over BBSW.

Sole lead UniCredit (CRDI.MI) declined to comment.

The offer was to include a euro-denominated tranche.

Investors said they are concerned by the uncertain future
of the company.

RAMS was last year forced to sell part of its business to
Westpac Banking Corp (WBC.AX) after failing to refinance over
A$6 billion of debt when credit markets suddenly dried up and
cut off its main funding source.
($1=A$1.06)
(Reporting by Cecile Lefort; Editing by James Thornhill)