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Thinktank closes $750m RMBS issue

The specialist commercial and residential property lender has successfully closed its fourth residential mortgage-backed securitisation issue for $750 million.

This is Thinktank’s 12th securitisation overall and takes the total of bonds to $5.5 billion. Pricing was fully disclosed across the structure with the Class A1 Notes being set at a margin of +1.65 per cent above the 30-day Bank Bill Swap Rate while the Class A2 Notes tightened from initial price guidance of +2.50 per cent to +2.40 per cent on the back of particularly strong investor demand.

“The participation of 20 institutional investors, split between Australia (58 per cent) and offshore (42 per cent) for this deal illustrates continuing strong support for the company’s dual mortgage-backed wholesale funding programs amid challenging conditions,” Thinktank chief executive Jonathan Street said.

Real money investors represented 50 per cent of the total amount issued while banks accounted for the balance. The transaction was 1.43x oversubscribed representing bids amounting to just under $1.1 billion. The pool of 1,003 first mortgage loans with an average size of $744,756 while 89.7 per cent of properties were in major metropolitan areas with 11 per cent in highly urbanised non-metro locations.

“While the continuing impacts of higher interest rates are being progressively felt throughout the economy and the demand for credit has certainly softened, our outlook for credit performance remains cautiously positive at this time and we are keen to continue our support for SME and self-employed borrowers seeking mortgage finance solutions,” Mr Street said.

NSW was the most prominent borrower state with 47.4 per cent, followed by Victoria with 37.88 per cent and Queensland at 9.5 per cent.

Self-managed superannuation fund (SMSF) borrowers accounted for 8.1 per cent of loans while the weighted average loan-to-valuation ratio (LVR) was 69.8 per cent with 39.7 per cent of loans extended to investors and the balance to owner-occupiers. Most loans were on principal and interest repayment at 81.7 per cent with only 18.3 per cent commencing under an interest-only period before converting to principal and interest.

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Thinktank is a specialist commercial, residential, and SMSF property finance lender that employs over 200 people across Sydney, Melbourne, Brisbane, and Perth.

To date, Thinktank has lent $8 billion in mortgage finance to Australian small- to medium-sized businesses, self-employed, and individual borrowers.

[Related: Resi secures expanded funding line]

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