AFG marks record $350m RMBS transaction

Australian Finance Group has announced the completion of a $350 million RMBS transaction, marking the company’s “largest” term deal.

AFG CEO David Bailey said that the transaction, which is due to settle on 7 September, underpins the important role of the securitisation sector to the Australian lending industry.

“The securitisation program is an important contributor to the company’s overall growth strategy," Mr Bailey said. "We are delighted to see the success of this issue further validate the AFG Securities business model.

”A very positive aspect of this transaction was the increase in the number of returning investors, as well as the increased number of new investors to our programme.”

The AFG 2017-1 Trust Residential Mortgage Backed Securities (RMBS) issue reflects investor confidence in AFG Securities, the CEO added.

“The performance of our portfolio continues to be very strong and investors are recognising the unique position AFG holds in the residential mortgage market. These standards have underpinned the success of our latest transaction.

“By being able to source competitively priced funding from a variety of investors, we can, in turn, provide competitively priced products to Australian consumers.”

The transaction was arranged by ANZ with joint lead managers NAB and ANZ.

Mr Bailey said: “As I have said before, the performance of every mortgage starts and ends with the credit policies and appetite of the lender. Our AFG securities programme has robust underwriting and risk protocols and this is reflected in the performance of our book.

“A vibrant and strong RMBS market is vital to ensure a greater level of competition and choice in the Australian mortgage market.”

AFG last week celebrated a FY17 profit boost of 33 per cent to $30.2 million. The diversified lending services company and brokerage reported loan book growth of 11 per cent to $133 billion.

“The growth is a reflection of multiple changes by lenders to their Australian product suites," Mr Bailey said. "The introduction of new products, changes to LVR bands, numerous product splits with differing rates, repayment options according to loan type, and significant changes to investor and owner-occupier pricing have been rolled out across our platform in the past 12 months.”

[Related: AFG boosts profit by 33%]

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Lucy Dean

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