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AFG prices $700m RMBS

The aggregator has successfully priced its largest RMBS transaction to date.

The Australian Finance Group (AFG) has priced a $700 million AFG 2020-1 trust residential mortgage-backed securities (RMBS) issue.

AFG CEO David Bailey said support from both domestic and international investors enabled the deal to “upsize” from $350 million to $700 million.

He welcomed the successful transaction at a time of dislocation in the market caused by the coronavirus pandemic.


“The strong support we received for the issue is evidence of the dept of the securitised business,” Mr Bailey said.

“Support that has enabled the company to issue $3.575 billion of paper into the market over the past seven years.”

The RMBS consists of:

  • A class A tranche totalling $612.5 million;
  • A class AB tranche totalling $49 million;
  • A class B tranche totalling $20.4 million;
  • A class C tranche totalling $7.6 million;
  • A class D tranche totalling $4.2 million;
  • A class E tranche totalling $2.8 million; and
  • A class F tranche totalling $3.5 million.

Commenting further on the RMBS transaction, Mr Bailey said: “As both an originator and a distributor of mortgages, our experience informs our lending practices.”

“Disciplined lending criteria and active management of the portfolio has meant we are in a fortunate position to take our paper to market.”

“Our portfolio, 100 per cent broker introduced has a track record of outstanding performance and we are very pleased to see both new and return investor participation.”

Mr Bailey concluded by thanking AFG’s investors for their support.

The RMBS transaction, which is AFG’s largest to date, settles on 30 July.

This follows news of AFG signing a strategic partnership with 86 400 to give its brokers access to the neobank’s digital mortgage offering from next month.

Recently, the Australian Competition and Consumer Commission (ACCC) announced that it would not oppose the proposed $120-million merger between AFG and Connective.

A combined AFG-Connective entity would cover around 40 per cent of the broker channel.

[Related: AFG prices $500m RMBS]

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