Not being satisfied with having just re-opened the market for non-AOFM backed RMBS issuance the week before last, ME Bank fronted up again last week with another non-AOFM backed RMBS issue, as referred to above. The issue via SMHL Securitisation Fund 2009-2 sold an amazing A$1.26 billion of RMBS, apparently with the support of a A$500 million cornerstone investor, which explains the initial issue size. Even so, there was considerable investor demand over and above this with sizeable offshore demand too. There may be some quirks to explaining the demand: for instance, industry funds swapping term debt, invested at the height of the crisis, into RMBS.The issue comprised: A$1.2 billion of Class A1 notes with a weighted average life of 2.9 years, rated 'AAA/AAA' and priced at 150 bps over one-month bank bills; A$27.7 million of Class AB notes with a weighted average life of 7.4 years and rated 'AAA/AAA'; and A$27.7 million of Class B notes with the same weighted average life as the Class AB notes but rated 'AA-'. Pricing was not disclosed on the Class AB and B tranches.This appears to be an amazing turnaround in the fortunes of the RMBS market. Of course, some market participants have pointed to a drying up of RMBS supply in the secondary market and a growing realisation by institutional investors that it is now time to get in before primary issuance spreads start to narrow even further.