Powered by MOMENTUM MEDIA
subscribe to our newsletter

Non-bank completes $2bn RMBS issue

A Brisbane-based lender has set a new record for the largest residential mortgage-backed securities issue by an Australian non-bank.

Firstmac has completed a $2-billion residential mortgage-backed securities (RMBS) issue, the largest RMBS issue set by a non-bank. The mortgage lender had initially set the record in 2017, when it issued a $1.77-billion RMBS. 

According to the non-bank lender, it paid a margin “above the bank bill rate of just 73 basis points” on the RMBS bonds, which it said was “the tightest margin paid by any non-bank since the GFC” (in 2007).  

Firstmac’s chief financial officer, James Austin, said the issue was supported with commitments from existing and new investors.

“As well as commitment from our regular investors, it has been phenomenal to see that we have attracted many new investors, some of whom have not previously bought any non-bank RMBS at all,” Mr Austin said.

Advertisement
Advertisement

“Firstmac’s proven track record as a strong sustainable business has been the main contributor to this milestone deal.”  

Twenty-nine institutions invested in the issue from all major markets, including Australia, Japan, South-East Asia, Europe and the United States.

According to the non-bank, the institutions recognised the non-bank for its “premium credit, arrears that run well below banks, and an engaged investor relations program”.

The lender, which manages approximately $13 billion in mortgages, said “much of its success is owed to its strong broker introduced business” as well as its retail arm online lender loans.com.au. 

Speaking to Mortgage Business, Mr Austin added that the new funding would enable Firstmac to “compete even harder against the banks in the coming year”.

PROMOTED CONTENT


He said: “Expect our loans to be competitively priced with some interesting new products also on the way in the near future.”

The transaction was arranged by Australia and New Zealand Banking Group, along with joint lead managers National Australia Bank, Standard Chartered Bank, and SMBC Nikko Capital Markets Ltd. 

In total, Firstmac has now issued $32 billion in bonds since starting its RMBS program in 2003. 

It comes as swathe of non-banks, including Pepper, BNK, Resimac and RedZed, have looked to gain funds for expansion by issuing large RMBS in recent months, which are being snapped up by hungry investors.

Moreover, several non-banks have also looked to monopolise on strong investor appetite by listing on the ASX, with Latitude Financial recently listing and expectations rising of an imminent Pepper Money IPO.

[Related: Pepper issues second RMBS for 2021]

Non-bank completes $2bn RMBS issue
Non-bank completes $2bn RMBS issue
mortgagebusiness

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The prudential regulator has written to ADIs to ensure that they are proactively managing lending risks and focusing on lending standards am...

As it waits for APRA to approve its acquisition of MyLife MyFinance, Challenger has flagged plans to expand the bank’s lending remit to co...

Australia has the second-highest mortgage debt as a proportion of GDP among OECD nations, according to a new report. ...

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.