BNK Banking Corp has announced that it has partnered with Bendigo and Adelaide Bank and Blackstone for a $250 million prime residential mortgage warehouse program named the Bullion Warehouse Trust No. 1.
The warehouse and securitisation program has a three-year availability period (subject to annual reviews), the bank said.
It added that senior funding to the warehouse program will be provided by Bendigo and Adelaide Bank, while the junior funding to the warehouse program is provided by BNK, with funds managed or advised by Blackstone.
Furthermore, Perpetual Corporate Trust will act as the trustee, security trustee and custodian, it said.
According to BNK, the funding facility would advance the company’s objectives, including diversifying funding sources including securitisation, increasing funding stability, which it said would support its lending growth goals, and broadening the bank’s product capabilities in the mortgage sector.
Commenting on the funding program, BNK Bank CEO Brett Morgan said the new facility is the first step in the bank’s securitisation program and has come at a time when funding costs in the residential mortgage-backed securities’ market are “extremely attractive”.
He said: “The establishment of our first warehouse and securitisation program puts in place one of the key foundations to support BNK’s growth aspirations.
“This funding will improve loan economics and competitive positioning. It’s another key milestone for BNK following our inaugural tier 2 hybrid issuance in January. We look forward to working with our new partners to continue our strong growth trajectory.”
BNK Group subsidiary Better Choice Home Loans said it would benefit from the $250-million funding program, with executive director Allan Savins stating that the facility would be used exclusively to support the growth of the lender’s gold home loan product range in the owner-occupied and investment loan space.
“The establishment of our first warehouse and securitisation program puts in place one of the key foundations that will support Better Choice’s growth aspirations,” Mr Savins said.
He also said that access to its own funding through the warehouse program would provide the lender with more control over pricing and home loan product design.
“With best interests duty laws now part of the lending landscape, the traditional mortgage management model has come under threat as many wholesale funders also have retail products,” he said.
“Our own funding allows Better Choice to compete on a level playing field and provides a point of difference to break the shackles in the prime lending space.”
[Related: BNK’s loan book hits $50bn]