Suncorp confirmed today that it has finalised pricing of its Apollo Series 2010-1 residential mortgage-backed securities (RMBS) issue from $500 million to $1 billion, in response to investor demand.

Suncorp said 14 investors participated in transaction with majority of the ClassA1 notes bought by domestic fund managers.

The ClassA1 notes totaled $630 million and was priced to yield 100 basis points more than the bank bill swap rate.

The Australian Office of Financial Management (AOFM) bought all of the ClassA2 notes totalling $300 million. ClassA2 notes were sold 110 basis points over swap.

Suncorp Bank chief executive David Foster said that investor demand for RMBS "reflects the maturity of Australian residential mortgage securities, demonstrates the resilience of that market in times of heightened uncertainty and reaffirms its importance to the efficient functioning of the broader banking industry. "

"This further supports the Bank's strong funding and liquidity position, lengthens the balance sheet and underpins profitable growth for our Bank," Foster said.

RMBS notes are backed by a pool of prime residential first ranking mortgage loans denominated in Australian dollars and originated by Suncorp. The notes are floating rate, principal passthrough, secured, limited recourse, rated securities. The notes may be called on any payment date after the outstanding amount of the notes amortises down to 10% of the original value.

Suncorp arranged the transaction while Macquarie Bank Limited and Deutsche Bank Australia Branch were Joint Lead Managers and Joint Book Runners.