A leading non-bank lender has successfully closed off its first public commercial mortgage backed securitisation (CMBS) transaction of $280 million.
Thinktank closed the deal last Friday following the strong performance of privately placed securitisation of July 2014.
Upsized from $200 million at launch on the back of strong demand, this marks Thinktank’s initial capital markets term issue open to institutional investors and now represents the second pure small ticket CMBS transaction in Australia since 2007.
“The interest registered by investors has genuinely exceeded our expectations and is indicative of the broad-based demand that has developed for alternate assets and the associated yield they can offer,” Thinktank CEO Jonathan Street said.
CBA acted as arranger and was also joint lead manager along with Deutsche Bank on the transaction.
“The success of this transaction has been made possible through the long standing support and guidance of our arranger and JLM, Commonwealth Bank along with key input from Deutsche Bank who have been closely involved with the business over the past three years,” Mr Street said.
“We look forward to keeping in close contact with our expanded group of investors and progressing onto our next transaction in around 12 months’ time.”
CBA director debt markets securitisation, Cullen Hughes, said the major bank is pleased to support the success of Thinktank’s first public CMBS issuance, which was also well supported by investors and increases the diversity of asset classes available in the market.
Deutsche Bank’s head of pacific ABS, Tim Richardson, said the nature of Thinktank’s conservative SME commercial mortgage collateral naturally lends itself to securitisation funding.
“The success of the upsized transaction and extent of investor engagement, both domestically and offshore, was certainly pleasing and positions the Thinktank SME CMBS programme well for further issuance in 2017 and beyond as the business grows.”
The Thinktank portfolio of first mortgage commercial property advances supporting the CMBS transaction comprises 513 loans with an average size of $545,804 and a weighted LVR of 64.2 per cent. Distribution by location shows 58 per cent in NSW, 14.8 per cent Victoria and 11.8 per cent in Queensland over a traditional mix of commercial security property types including retail, industrial and office.
The loan advances, predominantly to self-employed SME borrowers with clean credit histories, comprises 77.3 per cent full documentation including 15.2 per cent to SMSF borrowers and 22.7 per cent carrying alternate verification requirements.
Loans to property investors make up 53.6 per cent while no loans were in arrears on settlement date.
Thinktank launched in 2006 and is on track to surpass $1 billion in loan advances to Australian SMEs.
[Related: Commercial lender opens Melbourne office]