An adaptive audio encoding system (100; 400), comprising: a spatial analyzer configured to receive a plurality of audio signals (W, X, Y), to determine, based on these, frame-wise decomposition parameters (d, φ, θ; d̂, φ̂, θ̂); an adaptive rotation stage configured to receive said plurality of audio signals and to output at least a first, second and third rotated audio signal (E1, E2, E3) obtained by an energy-compacting orthogonal transformation, wherein quantitative properties of the transformation are determined by the decomposition parameters; a spectral envelope analyzer configured to receive a frequency-domain representation of the rotated audio signals, which contains transform coefficients, and to output, based thereon, a spectral envelope (Env); and a multichannel encoder (108; 425) configured to receive the frequency-domain representation of the rotated audio signals and to output transform coefficients of the first rotated audio signal only for frequency subbands in a first subband collection and transform coefficients of the second rotated audio signal only for frequency subbands in a second subband collection etc., wherein any subbands not included in any subband collection are to be synthesized at decoding, wherein the multichannel encoder determines the first, second etc. subband collections by means of a rate allocation process based on a joint comparison of a noise profile for all rotated audio signals and the spectral envelopes of all rotated audio signals; characterized in that: the noise profile is based on a sum of a noise shape, which is fixed for a given frame, and a noise offset (No) common to all rotated audio signals; and the rate allocation process includes varying the noise offset to approximate a coding bit budget. a spatial analyzer configured to receive a plurality of audio signals (W, X, Y), to determine, based on these, frame-wise decomposition parameters (d, φ, θ; d̂, φ̂, θ̂); an adaptive rotation stage configured to receive said plurality of audio signals and to output at least a first, second and third rotated audio signal (E1, E2, E3) obtained by an energy-compacting orthogonal transformation, wherein quantitative properties of the transformation are determined by the decomposition parameters; a spectral envelope analyzer configured to receive a frequency-domain representation of the rotated audio signals, which contains transform coefficients, and to output, based thereon, a spectral envelope (Env); and a multichannel encoder (108; 425) configured to receive the frequency-domain representation of the rotated audio signals and to output transform coefficients of the first rotated audio signal only for frequency subbands in a first subband collection and transform coefficients of the second rotated audio signal only for frequency subbands in a second subband collection etc., wherein any subbands not included in any subband collection are to be synthesized at decoding, wherein the multichannel encoder determines the first, second etc. subband collections by means of a rate allocation process based on a joint comparison of a noise profile for all rotated audio signals and the spectral envelopes of all rotated audio signals; characterized in that: the noise profile is based on a sum of a noise shape, which is fixed for a given frame, and a noise offset (No) common to all rotated audio signals; and the rate allocation process includes varying the noise offset to approximate a coding bit budget. the noise profile is based on a sum of a noise shape, which is fixed for a given frame, and a noise offset (No) common to all rotated audio signals; and the rate allocation process includes varying the noise offset to approximate a coding bit budget.