INVESTORS are responding to calls from the government and consumers for greater competition in the home loan market by supporting smaller lenders looking to raise money from the recently depressed credit markets.
Bendigo and Adelaide Bank yesterday scooped $1.1 billion from its latest issue of residential mortgage-backed securities - almost $500 million more than it was initially seeking.
The success of the issue - Bendigo Bank's second $1 billion transaction in four months - was underscored by the fact that $220 million of the offer was taken up by overseas investors.
Some of the entire group were new backers of the bank's paper.
Bendigo expects demand for the mortgage-backed securities will continue to grow, particular when the federal government's wholesale funding guarantee is removed at the end of the month.
The guarantee primarily helped the big banks to raise money on overseas credit markets during the global financial crisis.
