Strong investor interest in Firstmac’s online lender has driven demand for the non-bank’s latest RMBS transaction.
Firstmac yesterday upsized its inaugural US 144a RMBS transaction, as demand surged beyond its $500 million launch size to close at AU$750 million.
The encouraging result was on the back of strong investor interest in Firstmac’s online lender loans.com.au, Firstmac chief financial officer James Austin said.
“The demand is a firm endorsement by the investor community of the loans.com.au lending model and its position at the forefront of technological change in the retail mortgage market,” Mr Austin said.
Loans.com.au was established in 2011 and has since met demand from a market sector driven by competitive interest rates and low fees on full featured home loans.
“The loans.com.au model is solid and very effective and it has captured the attention of both the domestic and international investor market,” Mr Austin said.
“The loan quality is outstanding, with borrowers having an average deposit of one third of the value of their homes.
“Mr Austin said that the online lender’s key tenet is the low cost of residential mortgage distribution, which negates the financial overhead of maintaining a branch network.
“In future, the market will shift significantly towards the model with research showing 56 per cent of bank customers use online services while less than a third visited a branch.”
Loans.com.au has broadened its scope to offer vehicle finance and insurance.
The non-bank delivered a funding structure that reduced reliance on lender's mortgage insurance in light of Firstmac’s strong underwriting standards and portfolio performance.