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Non-bank prices second $1.25bn RMBS

La Trobe Financial has priced its second residential mortgage-backed securities transaction for 2021, after upsizing it from $750 million to $1.25 billion.

The Blackstone-owned company has said it achieved record pricing for its second $1.25 billion residential mortgage-backed securities (RMBS) issuance of 2021.

It noted that, due to strong interest in the 2021-2 transaction, it upsized the transaction from $750 million to $1.25 billion and brought forward the transaction by a week. 

The lender said the proceeds of the issue will be used to “continue writing home and business loans for everyday Australians at a critical time in the history of our economy”. 

La Trobe Financial CFO Martin Barry stated: “This $1.25-billion issuance continues to expand our already strong RMBS funding channel comprising of some 53 active holders of our paper...

“With this RMBS transaction, we achieved our goal of industry-leading pricing, notwithstanding increased levels of market supply and note participation from a select group of chosen investors comprising seven domestic, four from Asia, two from the United States and two from Europe or the UK,” he added. 

Mr Barry continued: “The 2021-2 transaction confirms the strength of our RMBS program, business platform and the quality of underlying assets. La Trobe Financial has co-invested alongside investors and currently holds $457 million of shock absorber and regulatory capital.” 

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Chris Andrews, deputy CEO and chief investment officer at La Trobe Financial, added: “Our RMBS program continues to play an important role in our strategic funding program. 

“This issuance sits alongside over $30 billion of fully repaid term debt and warehouse funding lines that we have managed since the business started in 1952. 

“Our RMBS investors are substantial partners of our business, and this new funding will assist us to continue to support underserved borrowers as the Australian economy rebounds from COVID-19.”  

He noted that La Trobe Financial is currently originating over $12 billion per annum, adding that the issuance complements its institutional mandates and $6.3 billion credit fund. 

“We have built a disciplined investment and funding strategy and  continue to deliver an outstanding value proposition for our investors that will see the business continue to grow,” he said.

La Trobe Financial will pay 80 basis points over the Bank Bill Swap Rate (BBSW) on $975 million of A1 notes, which have a weighted average life of 2.6 years.  

Pricing on $139 million of A2 notes, which have a weighted average life of 2.6 years, was 105 basis points over BBSW.  

[Related: Non-banks announce RMBS, funding deals]

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