A listed Australian mortgage provider has priced its largest ever non-conforming RMBS deal.
The $700 million Pepper Residential Securities Trust No. 16 (PRS16) transaction is the largest non-conforming securitisation in the group’s history and the largest in the Australian market since 2006.
The transaction was originally marketed at $600 million but strong demand saw the order book “heavily scaled” and the issue upsized to $700 million. Pepper said that at the initial deal size, the book was oversubscribed by more than 85 per cent.
Following a $400 million whole loan sale announced earlier this month, Pepper has now locked in $1.1 billion of its 2016 term funding requirements in the first quarter.
Commenting on the latest RMBS transaction, Pepper Group’s co-group CEO Patrick Tuttle said it was a “landmark transaction” for the lender, being the largest in its history and the largest Australian non-conforming mortgage securitisation in the last decade.
“As a regular issuer, it reaffirms our confidence in the resilience of the global debt capital markets and the high regard in which the Pepper name is held among both Australian and international investors in those markets,” he said.
Pepper’s Mike Culhane said the transaction demonstrates the continuing strong demand for the group’s PRS program in Australia and abroad, particularly among real money investors.
“Our ability to regularly access global capital is testament to Pepper’s expertise in originating and servicing high-quality residential mortgage assets and remains a core strength of our business,” he said.
Pepper was assisted in the transaction by NAB, CBA and Westpac.
[Related: Lender completes $1 billion RMBS deal]