AFG Securities prices upsized RMBS issue

Australia Finance Group’s (AFG) lending division AFG Securities has successfully completed an upsized $500 million residential mortgage-backed securities (RMBS) issue.

The AFG 2021-2 Trust issue of Australian prime residential mortgages is AFG Securities’ 12th issue since 2013, and the transaction is due to settle on Thursday (14 October).

This has taken the total paper issued to the market by AFG Securities to over $5.3 billion.

Major banks ANZ and National Australia Bank (NAB) acted as joint lead managers on the transaction.

Commenting on the transaction AFG chief executive David Bailey welcomed the support received for the transaction from both domestic and international investors.

He said: “We are very pleased to be able to upsize the transaction from $350 million to $500 million, particularly in the light of a degree of market uncertainty in recent times.

“We are very pleased with the upsizing of this transaction and look forward to continuing to deliver a competitive range of home loans to our brokers and their customers and sound investment opportunities to the RMBS market.

“The value proposition of brokers in the Australian home lending market has never been stronger and well-positioned products such as those offered by AFG Securities provide choice to Australian homebuyers.

“In addition, our conservative underwriting standards and consistent management of the portfolio means our loans track well below the Standard & Poor’s Performance Index (SPIN).”

AFG Securities priced its inaugural non-conforming RMBS transaction worth $500 million in October last year, and an upsized $750 million RMBS issue in May this year.

AFG priced its largest RMBS transaction to date in July last year, which was upsized from $350 million to $700 million.

[Related: Volt to power credit decisioning for AFG Securities]