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TOKYO, Nov 25 (Reuters) - Bank of Tokyo-Mitsubishi UFJ (BTMU) said on Monday it would provide a A$500 million (US$458 million) loan to AMP Ltd’s mortgage securitisation, marking the Japanese bank’s first foray into Australia’s residential mortgage-backed securities (RMBS) business.
Under the terms of the deal, BTMU, the core commercial banking unit of Mitsubishi UFJ Financial Group Inc, will provide a one-year revolving warehouse facility to AMP Bank, which will use the fund to originate mortgages and issue RMBS to investors.
Australia’s home-lending market, dominated by Australia’s four major banks including Australia & New Zealand Banking Group , remains strong despite the end of the country’s mining boom.
Investor appetite for the country’s RMBS has been recovering, with volumes so far this year at US$21.3 billion, twice those of the same period in 2012 and on track to be the biggest since the global financial crisis in 2008, Thomson Reuters data shows.
Australia’s strong mortgage market has attracted interest from Japanese banks, but they have faced difficulty making inroads given the lack of a retail presence there.
Mitsubishi UFJ Financial Group’s trust banking unit owns 15 percent of AMP unit AMP Capital Holdings.
US$1 = 1.0914 Australian dollars Reporting by Taiga Uranaka; Editing by Matt Driskill and Chang-Ran Kim