Macquarie launch appeases APRA
Macquarie Bank today announced the formation of a new funding vehicle for group subsidiaries not directly linked to its banking operations in response to new legislation limiting the scope of activities falling under its banking license.
Macquarie International Finance Limited (MIFL) has been created in response to a new regulatory requirement by the Australian Prudential Regulation Authority (APRA) that limits the level of intra-group exposure which MBL may have to subsidiaries that are not eligible for inclusion in the MBL Extended Licensed Entity.
Confirmation of what activities are to be included in the MIFL are yet to be finalised. However, they are expected to include funds management and securitisation management subsidiaries as well as certain overseas subsidiaries.
A spokesperson for Macquarie says these represent some of the company’s most successful businesses. He says the establishment of the new funding vehicle will not effect operational procedures.
“It’s really just for the purpose of the APRA requirements. The way we fund the operation is through the combination of different means of working capital. These funding processes will stay the same its just that now they will operate under a different structure.”
MIFL has been rated A3/P1 by Moody’s Investor Service, A-/A1 buy Standard and Poor’s and A/F1 by Fitch Ratings. It is a wholly owned subsidiary of MBL and has $400 million of share capital.
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