Suncorp Metway and the Australian Office of Financial Management created a bit of a stir last week with the announcement of a A$500 million prime RMBS issue via the Apollo Series 2010-1 Trust, which would be subsidised by AOFM buying the entire Class A2 tranche at below market rates.AOFM argued it has a mandate to support competition for residential mortgage lending and lending to small business. Therefore, it is now willing to invest in RMBS at tighter levels. In any event, it doesn't seem to have caused investors any concern, with Suncorp announcing on Friday that the issue size would be doubled to A$1.0 billion on strong investor demand.  AOFM bought A$300 million of Class A2 notes (AAA) with a weighted average life of 6.0 years, at a spread of just 110 bps over banks bills. Institutional investors took up A$630 million of Class A1 tranche notes (AAA) with a WAL of 1.5 years, at a spread of 100 bps over bank bills. There was also A$50 million Class AB notes (AAA) and A$20 million Class B notes (AA-), both with a WAL of 5.3 years. The issue had been due to price tomorrow.