UPDATE 1-St George sells A$1.2 bln auto ABS to 17 buyers

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SYDNEY, July 18 (Reuters) - St. George Bank Ltd SGB.AX,
Australia's fifth largest bank, said it has increased to
A$1.236 billion ($1.20 billion) and priced a bond issue backed
by auto-loan receivables, its second such offer this year.

St. George more-than-doubled the issue size, from A$500
million anticipated initially, following a series of roadshows
in Europe.

"It's our second car deal and it's expected to be
repo-eligible with the European Central Bank," said Roger
Desmarchelier, St. George's chief manager of group
securitisation.

The issue is expected to be eligible for repurchase
agreements with the ECB, making it the second Australian
asset-backed issue to be repo-eligible by the ECB.

Earlier this month, top ECB officials said the bank may
need to tighten its collateral criteria.

Assets that are repo-eligible are attractive to bank buyers
in particular who can use them in their daily liquidity
operations.

The issue size increase also follows a dearth of supply.

"There is a shortage of new asset-backed transactions in
Europe," said Desmarchelier.

St. George's offer, called Crusade ABS Series 2008-2 Trust,
was lead managed by St. George Bank (SGB), Macquarie Bank (MB)
and Royal Bank of Scotland (RBS).

Most of the Crusade notes were denominated in euros and
placed in Europe across a handful of countries.

A total of 17 investors participated in the offer.

Eight Australian buyers, mostly money market investors,
purchased the short-dated Australian dollar tranche, while nine
European accounts, mostly banks, shared the euro tranches.
Auto-backed bonds, a type of asset-backed security, are unusual
in Australia where residential-mortgage-backed securities make
up more than 80 percent of asset-backed sales.

However, since the U.S. subprime mortgage crisis hit global
markets almost a year ago, mortgages have become unpopular for
many credit institutions worldwide, opening the door to other
asset classes such as auto-backed loans.

The St. George issue is the fourth Australian auto-loan
backed issue this year.

The notes settle on July 24.

Deal details are as follows: CLASS AMOUNT RATINGS
AVERAGE MARGIN LEADS

(MLN) S&P/MOODY'S LIFE (basis points) A1
A$200 A1+/P-1 0.28 +80/1mBBSW MB/SGB A2T1
EUR279 AAA/Aaa 1.94 +120/3mEuribor MB/RBS A2T2
EUR300 AAA/Aaa 1.94 +120/3mEuribor MB/RBS B
A$42.8 AAA/Aaa 2.74 not sold MB/SGB C
A$22.2 BBB/Baa2 2.74 not sold MB/SGB D
A$3.5 BB/Ba2 3.88 not sold MB/SGB E
A$3.3 B/B2 3.88 not sold MB/SGB SN
A$22.5 unrated 3.88 not sold MB/SGB
($1=1.032 Australian Dollar)
(Reporting by Cecile Lefort)