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Pepper issues second RMBS for 2021

The non-bank lender has priced a $750-million non-conforming transaction, with pricing for the AI notes at the lowest price since before the GFC.

Pepper Group has announced that it has priced a $750-million residential mortgage-backed securities (RMBS) transaction called the PRS29.

The non-conforming transaction has marked the non-bank lender’s second securitisation this year.

According to Pepper, the PRS program comprises a mix of non-conforming and prime mortgages and is designed to boost the funding of its asset originations.

The arranger for the transaction was Westpac, while the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Macquarie Bank acted as joint lead managers.


The transaction is scheduled to settle on 5 May.

Commenting on the transaction, Pepper Group Australian CEO Mario Rehayem said: “The entire market is benefiting from a favourable environment right now. However, Pepper’s long-term track record and reputation in the debt capital markets is seeing new and long-term investors providing overwhelming support for our paper.”

Pepper treasurer Anthony Moir said he was pleased with the outcome of the transaction.

“The strong interest and backing from new and existing investors in this transaction led to the offer being significantly oversubscribed, with pricing for the A1 notes at the tightest level in the market this year, when compared to similar non-conforming transactions, and the lowest since before the GFC,” he said.

“Our deep investor relationships and consistent transaction issuance, along with our record of having called every term deal at the first opportunity provides an attractive proposition for investors.”


Earlier this year, Pepper announced that it had priced a $750-million I-Prime 2021 transaction, and said that it is expecting to deliver several securitisation transactions to market.

In January, Pepper announced that it would enter the Japanese financial services market after acquiring 100 per cent of Millennium Holdings KK, the holding company of Millennium Corp.

It also priced an asset finance transaction worth over $615 million in December last year, a non-conforming securitisation worth $750 million in November, and a $1.1-billion I-Prime securitisation in October.

[Related: Non-bank completes $813m warehouse facility]

Pepper issues second RMBS for 2021
Pepper issues second RMBS for 2021

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