Pepper prices 1st social bond

Pepper Money Limited (Pepper Money) has priced its first social bond, raising $300 million.

The transaction will settle on Thursday (9 June).

The funding will be used by Pepper to finance loans that “deliver positive social outcomes”. 

According to the lender, this could include providing home loans to Australians who are purchasing a home to live in who would not typically qualify for a loan with traditional banks in Australia (for example, home buyers who have adverse credit histories).

Pepper Money’s chief executive Mario Rehayem, commented: “Since inception, Pepper Money’s mission has been to help people succeed. We challenge the way loans are designed and distributed, focusing on the underserved and undervalued segments – those customers that traditional banks do not cater to. 

“Our social bond raising reinforces the fundamental principles of our business, which are to drive financial inclusion through innovation and to seek to lead the industry in making a positive contribution to society.”

Pepper Money’s treasurer, Anthony Moir, added that he was “delighted in the market demand for social bonds, particularly in light of current market conditions”.

“It is a very positive result as we continue to build the strength of our 2022 funding programme,” he said.

The raise is the fourth public securitisation transaction completed by Pepper Money so far this year, bringing its total raised to $2.5 billion this calendar year. 

The transaction was arranged by National Australia Bank Limited, which also acted as sustainability coordinator and joint lead manager. The Commonwealth Bank of Australia (CBA) and Westpac Banking Corporation also acted as joint lead manager, while RBC Capital Markets was co-manager.

The social bond raising complements Pepper Money’s Prime 2022-1 transaction, which included a $330 million green tranche.  

[Related: Pepper prices $500m in latest RMBS transaction]