RedZed Lending Solutions has announced that it has successfully priced a residential mortgage-backed securities transaction worth $400 million.
The RedZed Trust Series 2020-2 is the lender’s second transaction of 2020 following its $300-million inaugural commercial mortgage-backed security (CMBS) transaction, RedZed Trust STC Series 2020-1, which settled in June.
The transaction was supported 100 per cent by real money across all tranches. The Australian Office of Financial Management (AOFM) was supportive of the transaction, but was not required.
Commenting on the transaction, Evan Dwyer, managing director of RedZed, said: “We were pleased to achieve so much interest and proceeded without AOFM support.
“Investors’ early engagement signified their commitment to our securitisation program and confidence in RedZed’s understanding of the self-employed. Our low hardship and arrears also helped.
“We remain committed to supporting the self-employed, particularly during these challenging times.”
Moody’s and Fitch assigned preliminary ratings.
The $115 million Class A-1S notes, $165 million Class A-1L notes, and the $62 million Class A-2 notes were rated Aaaa(sf)/AAAsf.
The $29.20 million Class B notes, the $4.40 million Class C notes, the $7.60 million Class D notes, the $2.50 million Class E notes, and the $4 million Class F notes are assigned preliminary ratings of Aa2(sf), A2(sf), Baa2(sf), Ba2(sf) and B2(sf), respectively, with the offering completed by $7.60 million of unrated Class G-1 and G-2 notes.
The Commonwealth Bank of Australia and NAB acted as joint lead managers, and the transaction is due to settle on 10 September.
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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.