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SFSF investment inches towards $4bn

Total funds invested or committed by the Structured Finance Support Fund have exceeded $3.5 billion as at September.

The Australian Office of Financial Management (AOFM) has revealed that, as at 30 September, total investments and commitments made by the Structured Finance Support Fund (SFSF) amounted to $3.6 billion.

This is up from $2.7 billion as at 30 June.

The SFSF was announced by the federal government in March as a $15-billion investment fund that aimed to support and enable smaller lenders to continue lending to small businesses and individual customers throughout the COVID-19 pandemic.

The AOFM was provided with the funds to invest in structured finance markets often used by smaller lenders that provide consumer and business finance.

Across its public (primary and secondary) markets work stream, cumulative public market investments made since the SFSF’s inception totalled around $1.36 billion as at 30 September, and around $119 million was invested in the quarter, specifically in early July.

“Public securitisation market conditions improved during the quarter, reducing the need for SFSF support for primary and secondary markets,” the AOFM said in an update.

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“Market feedback received by the AOFM is that its preparedness to invest SFSF funds to fill gaps across investment grade tranches has reduced the execution risk for issuers of public securitisation transactions.”

A total volume of just under $7.9 billion was provided across 12 primary market transactions, which was supported by the SFSF in the quarter, with all but two transactions cleared without SFSF investment.

Around $1.4 billion invested since late March has supported 21 transactions totalling around $13.9 billion.

Across the private market, as at 30 September, SFSF commitments of around $2.1 billion have supported 39 individual warehouses sponsored by 29 eligible lenders (excluding one proposal that was withdrawn by the proponent after approval).

In the quarter ending 30 September, 15 individual warehouse investments sponsored by 12 eligible lenders were approved.

Around $17 billion of support has been committed for the total capacity of warehouses.

The AOFM also revealed that during the September quarter, it finalised arrangements for the establishment of the forbearance special purpose vehicle (fSPV), which enables small lenders to provide forbearance for borrowers experiencing COVID-19-related hardships.

It reported that 63 trusts sponsored by five participating originators were approved for inclusion, with the first draw on the fSPV occurring in September.

The total approved limit for these participants is $95.5 million.

The AOFM had revealed in its previous update that it had worked with the securitisation industry to establish this special purpose vehicle.

It had released a notice regarding proposals for access to the fSPV, and announced that BNY Mellon had been appointed as trustee, trust manager and security trustee, while the collateral verification agent is Deloitte Touche Tohmatsu.

[Related: AOFM to invest $90m in Prospa warehouse]

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