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Non-bank lender completes $500m CMBS

Thinktank has completed its ninth CMBS raising $500 million in funds.

Specialist property lender Thinktank has recently concluded its ninth commercial mortgage-backed securitisation (CMBS) issue, raising $500 million in funds.

This latest transaction marked Thinktank’s 13th securitisation, bringing the total value of bonds issued to $6 billion.

With over 200 employees, Thinktank specialises in commercial, residential, and SMSF property finance.

Chief executive of Thinktank, Jonathan Street, stated that the $500 million deal saw participation from 23 institutional investors, including two new investors.

The investor base was divided between domestic (57 per cent) and offshore accounts (43 per cent).

Mr Street emphasised that this transaction highlighted ongoing support for Thinktank’s dual mortgage-backed wholesale funding programs despite challenging conditions for Australian issuers.

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“While the continuing impacts of higher interest rates are being progressively felt throughout the economy and the demand for credit has certainly begun to soften, our outlook for credit performance remains cautiously positive at this time, Mr Street said.

“We are keen to maintain our long term support of SME and self-employed borrowers seeking mortgage finance solutions.”

The deal received bids totalling just over $1.0 billion, resulting in an oversubscription rate of 2.1x.

The pool of first mortgage loans consisted of 776 loans, with an average size of $644,324.

Among the borrower states, NSW stood out with 41.2 per cent, followed by Victoria with 33.6 per cent, and Queensland at 13.1 per cent.

Self-managed superannuation fund (SMSF) borrowers comprised 30.2 per cent of the loans.

The weighted average loan-to-valuation ratio (LVR) was 65.2 per cent, with 49.8 per cent of loans extended to investors and the rest to owner-occupiers.

Most loans followed a principal and interest repayment structure (65.6 per cent), while 34.4 per cent initially started with an interest-only period before transitioning to principal and interest payments.

Notably, 85.1 per cent of the properties were located in major metropolitan areas, while 14.9 per cent were in highly urbanised non-metro locations.

Detailed pricing information was disclosed across the structure, with the Class A1 Notes set at a margin of +1.55 per cent above the 30-Day Bank Bill Swap Rate and the Class A2 Notes at +2.35 per cent over the 30-Day Bank Bill Swap Rate.

Both margins tightened by 0.10 per cent from initial price guidance due to investor interest, the lender said.

The securitisation pool included 63 per cent Full Doc and SMSF loans, while alternate verification made up 36.6 per cent. Industrial properties represented the largest category at 39.8 per cent, followed by retail, strata office, and professional suites at 38.9 per cent. Standard residential properties accounted for 20.1 per cent.

The transaction was assigned final ratings from Standard and Poor’s (S&P).

Established in 2006, the company operates from offices in Sydney, Melbourne, Brisbane, and Perth. To date, Thinktank has provided over $9 billion in mortgage finance to Australian small- to medium-sized businesses, self-employed individuals, and borrowers.

[Related: Thinktank closes $750m RMBS issue]

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