Pepper prices $500m in latest RMBS transaction

Pepper Money Limited (Pepper) has revealed that it has priced its latest residential mortgage-backed security (RMBS) transaction at $500 million, marking the latest in its PRS program and first non-conforming deal for 2022. 

This transaction (PRS 32) is currently expected to settle on Wednesday (30 March). 

As per the ASX-listed lender, PRS 32 is its second public securisation for the year, bringing the total funding raised from public markets during 2022 at $1.5 billion to date. 

NAB has been named as both the arranger and joint lead manager, sharing the latter role with Commonwealth Bank, HSBC and Westpac. 

RBC Capital Markets has also been named as co-manager. 

Pepper chief executive Mario Rehayem commented that he was pleased to see continued support from debt capital market investors for both Pepper’s Prime and Non-Conforming issuances “despite the tougher market conditions”.

Pepper’s PRS program comprises a mix of non-conforming and prime mortgages.

“This deal supports the ongoing growth opportunities available to us, in particular in the underserved segments of the mortgage market where we have a strong track record in creating financial inclusion by supporting self-employed and small business customers,” Mr Rehayem said.

“We continue to see strong demand for all our products.” 

Pepper treasurer Anthony Moir commented that this transaction was a positive result given market conditions and reflected Pepper’s “well-established investor relationships and exemplary track record of calling every term deal at the first opportunity and providing an attractive investment proposition for investors”.

Pepper’s previous RMBS transaction came last November, with the non-bank pricing PRS 31 at $750 million.

The ASX-listed lender closed out 2021 at $4.8 billion in security transactions. 

[Related: Pepper closes 2021 with $4.8bn raised]