ME Bank finalised the second mortgage-backed securities funding of the calendar year on Friday, with the deal size increased to A$1 billion.The funding cost to the bank is a little cloudy, however. The top tranche of the structure for the SMHL Series Securitisation Fund 2012-1 is a US$400 million, 12-month bullet priced at Libor plus 40 basis points. National Australia Bank is providing ME Bank with a redemption facility to ensure that the notes are redeemed, though there is also an option to fund the initial redemption through a further issue of notes, with another one year term to maturity.There is a second tranche, of A$50 million of three year notes yielding 5.27 per cent and, a third tranche, of A$477.5 million, priced at 150 bps over bank bills.The Australian Office of Financial Management bought A$123.5 million of the third tranche.The remainder of the issue comprises A$46 million of Class AB notes, priced at 265 bps over bank bills, and A$25 million of Class B notes.