Aussie Hospital Deal Feels Queasy


An innovative hospital securitization priced in June is in danger of being downgraded because of a CreditWatch negative placed on one of the sponsoring entities by Standard & Poor's. The deal was the A$92 million securitization of cashflows from the Joondalup Health Campus at Wanneroo, Western Australia, arranged on behalf of single-A rated, transport-to-health care company Mayne Nickless.

Mayne Nickless and the arranger, Westpac Banking Group, played down the possibility that investors would be adversely affected, arguing that the bonds had been bought on a take-and-hold basis and were too illiquid to be price sensitive; and that investors had in any case factored in a possible downgrade. The deal had been tailored to meet the requirements of annuity investors, a suddenly fashionable market following recent changes to legislation affecting them.

Meanwhile, RAMS Mortgage Corp., the country's second-biggest non-bank mortgage securitizer, is diversifying into lending for property investment. The company is targeting only existing customers initially, offering second mortgages worth up to 110% of the investment property, providing there is cross-collateralization between the asset and the equity in the borrower's principal residence.

The highest available loan-to-valuation ratio on property financed on a stand-alone basis is 95%. RAMS hopes to rollout the product to non-customers shortly.