The European Central Bank has accepted the first securities
backed by Australian receivables as being eligible for
inclusion on the eligible assets database of the European
Central Bank ("ECB"), making them
"repo-eligible" with the ECB.
It is hoped that ECB repo-eligibility will increase the
investor base and liquidity of Australian asset-backed and
residential mortgage-backed securities.
The first securities backed by Australian assets to be
repo-eligible were issued under Macquarie Bank's
recently established repackaging programme, the ARC Funding
Programme, which was structured with the purpose of taking
advantage of these operations of the ECB. Those securities are
backed by securities issued by Macquarie Leasing's
SMART securitisation trust, the underlying assets of which are
commercial equipment and motor vehicle lease and hire purchase
Below, we set out some of the key requirements of the
criteria published by the ECB for the repo-eligibility of
The issuer of the securities must be established in the
European Economic Area ("EEA") or in one of the
non-EEA G-10 countries unless the securities are asset-backed
securities in which case the issuer must be incorporated in
The securities must be:
senior ranking and meet high credit standards;
denominated in Euro and issued in the EEA; and
admitted to trading on a regulated market.
If the securities are issued in bearer form, they must
comply with the new global note format which requires
entering into an agreement with the relevant clearing
On 24 June 2008, the first series of securities issued under
the ARC Funding Programme were included on the ECB's
eligible assets database. Clayton Utz acted for Macquarie Bank
in that transaction.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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