Australia's Suncorp securitises A$2.6 bln RMBS

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SYDNEY, May 15 (Reuters) - Suncorp-Metway Ltd (SUN.AX: Quote, Profile, Research, Stock Buzz),
Australia's second-biggest home and car insurer, said on
Thursday it has securitised internally A$2.6 billion ($2.4
billion) of residential mortgage-backed securities (RMBS) to
give it greater access to liquidity if needed.

Suncorp is the latest in a growing list of Australian banks
that have adopted the strategy amid economic uncertainty and
rising funding costs. Westpac Banking Group (WBC.AX: Quote, Profile, Research, Stock Buzz)
securitised A$10.6 billion of RMBS in February, while National
Australia Bank (NAB.AX> and Bank of Queensland (BOQ.AX: Quote, Profile, Research, Stock Buzz) have
also securitised debt.

Internal securitisation consists of converting mortgages
into securities that become eligible for repurchase agreements
with the Reserve Bank of Australia.

Last year, the RBA widened the type of assets it would
accept as collateral at its repo operations, including certain
types of RMBS, to promote liquidity in financial markets.

The securities are not intended to be sold to investors and
are expected to remain on the balance sheet unless the banks
require liquidity.

Suncorp said the operation may generate up to A$2 billion
in additional liquidity, if required.

The Suncorp securitisation deal has three tranches:

--A$2.290.6 billion class A notes, rated AAA by S&P;

--A$96.2 million class B notes, rated AA by S&P.

--A$213.2 million class C unrated notes.
($1=A$1.07)
(Reporting by Cecile Lefort)