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Bluestone issues $700m prime RMBS

The non-bank lender has closed its first RMBS deal under the Bluestone Prime program, worth $700 million.

Bluestone has successfully issued Bluestone Prime 2021-1, marking its first residential mortgage-backed securitisation under the Bluestone Prime program and the first RMBS transaction of 2021.

The $700 million deal represents Bluestone’s 32nd RMBS issuance, and consists of 100 per cent prime full documentation loans from Bluestone and Athena Home Loans.

Bluestone (with its parent company Cerberus Capital Management) entered into a partnership with Athena Home Loans (originator of low loan-to-value ratio prime mortgages) this year, which will allow it to purchase around $2.5 billion of loans over the next three years, with the first tranche of $320 million acquired in May 2021.

Around $400 million of the RMBS deal is sourced from Bluestone, with the remaining $300 million from Athena Home Loans.


According to Bluestone, the $700-million RMBS deal had strong domestic and offshore investor interest, with the transaction almost 1.7 times oversubscribed, with some tranches receiving more than five times coverage.

In total, 26 investors bid in the trade, with 60 per cent of the bids coming from offshore.

The lender has been originating prime mortgages since 2019, and these mortgages now represent over 80 per cent of Bluestone’s total origination volume.

It said it has anticipated that the prime program will issue two to three securitisations per year off the back of Bluestone originations and loans acquired from Athena Home Loans, which it added will generate high-quality securitised pools that the lender will issue to market on a regular basis.

Bluestone will continue its Sapphire non-conforming program with around one to two deals annually.


Commenting on the RMBS deal, Bluestone CEO Campbell Smyth said that it would set the lender on its path to increase origination activity for the remainder of 2021.

“The issuance of Bluestone Prime 2021-1 tops off a fantastic July, having launched our new digital core platform earlier in the month delivering industry-leading technology and processes to drive exceptional broker and borrower experiences,” he said.

Bluestone managing director, treasury and funding Todd Lawler said: “The first issuance has already received overwhelming interest and support from investors, reflecting the excellent credit quality of the underlying pool validation of the partnership with Athena and support for the programmatic issuance of prime deals going forward.

“The team is incredibly proud to launch our new prime securitisation program.”

[Related: Bluestone reinstates 90% LVR product]

Bluestone issues $700m prime RMBS
Bluestone issues $700m prime RMBS

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Malavika Santhebennur

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.

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