A number of superannuation funds have committed to Members Equity's (ME) wholesale funding requirements following a potential downgrade by Standard and Poor's (S&P).
In April, S&P placed ME on credit watch after the firm reviewed the bank's funding and liquidity requirements.
The institutional backers include AustralianSuper and external parties and stakeholders. ME is owned by 40 industry superannuation funds, including AustralianSuper, Hostplus and HESTA.
Collectively these funds have more than $150 billion in funds under management.
"With the support of our investors we have been able to meet our funding requirements over the next 12 to 18 months," ME chief financial officer Nick Vamvakas said.
Vamvakas said the initial response from investors was positive following discussions with the groups.
"We continue to be supported by both our shareholders and investors. After completing their due diligence they have now committed to our funding needs," he said.
Last month, S&P announced it would monitor the bank's off-balance sheet funding sources over the next few months and assess whether a downgrade would be applied.
The bank's current rating is BB/A2. ME could face a rating downgrade of BBB-/A3.
"The current market disruption has inhibited the bank's new securitisation issuance and will have a material impact on earnings and the bank's ability to grow its off-balance sheet mortgage portfolio," S&P said at the time.
Vamvakas said investors had conducted due diligence on the bank's current holdings of AAA-rated mortgage-backed securities.
He said they were comfortable with allocating part of their portfolio to the securities.
ME would meet with S&P to provide "evidence that we have locked in our funding", he said.
"Hopefully they will change their outlook on the bank," he said.
S&P's assessment of ME was part of a wider review of the sector.
