The Australian Business Securitisation Fund will expand its activities, with plans to act as an underwriter for securitisation transactions. The Australian Office of Financial Management, which administers the ABSF, announced that it will consider proposals to partially underwrite senior tranches of public term securitisation transactions backed by SME lending. It will also consider underwriting mezzanine tranches with investment grade ratings. The ABSF was established in 2019, with a A$2 billion commitment of government funds, to help increase the availability of credit for small business by investing in securitisation warehouse facilities and term securitisations of small business lenders. So far it has made four investments in warehouse facilities: $250 million in a Judo Bank warehouse in 2020; an $87.5 million mezzanine investment in a GetCapital (now Shift) warehouse last September; and a $65 million investment in a Prospa warehouse in April this year.  A $30 million investment in an OnDeck Australia warehouse was announced last September. It involves replacing an investment of the Structured Finance Support Fund and has not been completed. When it comes to its new underwriting role, the AOFM said it may waive some of the submission requirements for term public transactions where it is familiar with the proponent from past proposals.  “An important consideration will be whether pools to support transactions comprise loans predominantly from underdeveloped segments of the SME lending market,” the AOFM said. Proponents will be required to adopt and implement the SME lending data template published by the Australian Securitisation Forum. The AOFM will require that the ABSF is the first investor to be scaled in the book-build process, consistent with the aim of attracting and not crowding out investors. Treasury released a review of the ABSF in April, saying the industry consensus was that it was “making progress towards meeting its objectives” and that there was broad support for it to continue. It recommended that the AOFM continue to implement the fund with an emphasis on under-served parts of the SME funding market and a goal of facilitating term securitisation market access for SME lenders.