Thinktank closes $600m CMBS

Think Tank Group (Thinktank) has successfully closed its sixth commercial mortgage-backed securitisation (CMBS) transaction of $600 million on 16 October.

This brings the total of bonds now issued by the lender to $2 billion.

The transaction was assigned final ratings from Standard and Poor’s.

The $360.0 million Class A1 notes and the $110.4 million Class A2 notes are rated AAA(sf), while the $36.0 million Class B notes, the $32.4 million class C notes, the $28.2 million Class D Notes, the $13.2 million Class E Notes and the $9.6 million Class F Notes have assigned ratings of AA(sf), A(sf), BBB(sf), BB(sf) and B(sf), respectively.

Pricing was fully disclosed across the structure, with the Class A1 notes being set at a margin of 1.60 per cent above the 30-day bank bill swap rate.

The rated notes were placed across a total of 16 institutional investors and comprised of 77 per cent of onshore account and 23 per cent offshore account participants.

Commenting on the transaction, Thinktank CEO Jonathan Street said: “The support demonstrated by existing and new institutional investors from both on and offshore is indicative of the strong, broad-based demand that has continued to develop for alternate asset-backed issuance.”

Real money investors represented 83 per cent of the total amount issued, while banks accounted for 17 per cent.

The transaction was 1.4 times oversubscribed, representing bids in excess of $850.0 million.

The pool of 1,035 first mortgage loans with an average size of $580,000 was comprised of 27 per cent industrial properties, 16 per cent retail, 9 per cent office, 3 per cent mixed-use commercial and 45 per cent residential.

Meanwhile, 86 per cent of the properties were located in metro areas, with 14 per cent in non-metro areas.

NSW was the most prominent state with 53 per cent, followed by Victoria with 28 per cent and Queensland with 11 per cent.

Self-managed superannuation funds (SMSF) borrowers accounted for 27 per cent of loans, while the weighted average loan-to-value ratio (LVR) was 66.5 per cent. Just over half of the loans (53 per cent) were to investors, with the rest to owner-occupiers. Most loans were on principal and interest repayment (66 per cent), while only 34 per cent were in an interest-only period.

Less than 0.5 per cent of borrowers had any form of adverse borrowing history.

“This transaction has been an excellent result amid challenges in the market and allows Thinktank to continue on its growth path and maintain the orderly supply of credit into the critical SME and self-employed sectors of the economy,” Mr Street concluded.

Thinktank is a specialist commercial, residential and SMSF property finance provider, and to date has provided more than $3 billion in mortgage finance to small-to-medium-sized businesses and individual borrowers.

It closed its first public CMBS transaction of $280 million in 2016, and its third transaction of $300 million in 2017.

[Related: RedZed prices $400m RMBS]