A non-resident is an entity that is not domiciled in Australia. This can include individuals, businesses, or government agencies. Non-residents can participate in securitisation transactions in a number of ways, including:
- Investing in securitised products: Non-residents can invest in securitised products, such as asset-backed securities (ABS), that are issued by Australian securitisation vehicles. This provides them with an opportunity to gain exposure to the Australian market without having to invest directly in Australian assets.
- Securitising Australian assets: Non-residents can also securitise Australian assets, such as residential mortgages or commercial loans. This allows them to raise capital from Australian and international investors, and to transfer the credit risk associated with these assets to investors.
Some of the applications of non-resident securitisation in Australia include:
- Financing infrastructure projects: Non-residents can securitise Australian infrastructure assets, such as toll roads or airports, to raise capital for the construction or expansion of these projects.
- Reducing the balance sheet risk of financial institutions: Non-residents can securitise Australian loans held by financial institutions, such as banks or credit unions. This allows the financial institutions to reduce their balance sheet risk and to free up capital for lending to other customers.
- Providing liquidity to the Australian market: Non-resident securitisation can provide liquidity to the Australian market by increasing the supply of securitised products. This can make it easier for investors to gain exposure to the Australian market, and can help to improve the efficiency of the market.
Overall, non-resident securitisation can be a valuable tool for both non-residents and Australian businesses and investors. It can provide non-residents with an opportunity to gain exposure to the Australian market, and it can help Australian businesses and investors to raise capital and reduce their balance sheet risk.