Mortgage Backed Bonds Limited

MBBL enabled investors to gain exposure to the property sector. Bonds were issued to members of the public and the proceeds were subsequently invested in a range of property loans throughout New Zealand, predominantly in the commercial office and retail sectors.

As a consequence of the global financial crisis MBBL suspended the repayment of principal on Bonds and the issue of new Bonds in August 2008. On 31 July 2009, Bond holders approved a moratorium proposal and the wind-down of the Bond programme commenced in August 2009.

Exemptions

As a non-bank deposit taker under the Reserve Bank of New Zealand Act 1989 (‘Act’), MBBL would ordinarily need to comply with certain requirements for non-bank deposit takers that are prescribed by the Act. However, because MBBL is currently in moratorium and does not accept any subscriptions from the public for Bonds or other debt securities, it is exempted from the following requirements:

From 1 March 2010:

• having a credit rating

• having a chairperson that is not an employee of MBBL or employed by a related party of MBBL; and having at least two independent directors
• including a minimum capital ratio in its trust deed and maintaining this capital ratio
• including a maximum limit on exposures to related parties in its trust deed and not exceeding this limit. This exemption is subject to MBBL not increasing or renewing existing exposures to related parties, or creating any new exposures to related parties
• including liquidity requirements as defined in the Act in its trust deed and complying with those requirements

The exemption from obtaining a credit rating was granted under the Deposit Takers (Moratorium) Exemption Notice 2009.

This exemption notice was amended by the Deposit Takers (Moratorium) Amendment Exemption Notice (No 2) 2010 on 1 December 2010 to provide MBBL with exemptions from the governance, capital ratio, related party exposure and liquidity requirements referred to above.

All exemptions expire on 1 March 2013.