Pepper prices upsized $850m RMBS

Pepper Money Limited (Pepper) has priced its fourth non-conforming PRS deal for 2023, PRS38.

The transaction, which is its sixth public securitisation for 2023, was upsized from $750 million to $850 million.

It comprises a mix of prime and near-prime mortgages.

According to the lender, the funds raised under PRS38 will be used to support its non-conforming mortgage business growth.

Pepper chief executive Mario Rehayem said: “Pepper Money’s mission to ‘help people succeed’ is clearly demonstrated through our strength in the Non-Conforming mortgage segment. Since the beginning of 2023 we have, including PRS38, completed four PRS securitisations raising A$3.2 billion.

“The demand for PRS38 was very strong allowing us to upsize from A$750 million to $850 million. Our ability to raise a further $850 million under PRS38 this calendar year, demonstrates the strong investor support for Pepper Money’s securitisation programs.

“As one of Australia’s leading non-bank lenders, we have, over the past 23 years, developed deep understanding of customer niches – typically those underserved by banks. Our ability to be innovative, agile and disciplined and to leverage our core competencies of credit, funding, distribution, and technology – has seen the business grow from a specialist lender in 2000 to a leading non-bank lender in Mortgages and Asset Finance today.

“We have a strong 23-year track record of successfully managing through all cycles. We know when to drive volume, when to flex to the margin, how to manage and allocate capital and how to price for risk.

“With A$19 billion in Assets under Management (AUM) today we remain strong and have the ability to capitalise on opportunities as they emerge.”

Pepper Money’s treasurer Anthony Moir commented: “Since 2003, Pepper Money has successfully completed 60 securitisation transactions (including PRS38) raising more than A$37.8 billion.

“The strong ongoing support from debt capital market investors for both Pepper Money’s Prime and Non-Conforming issuances demonstrates the strength and longevity of our relationships and our ability to continue to fund Pepper Money’s ongoing growth.”

The Commonwealth Bank of Australia was the arranger and joint lead manager, while National Australia Bank Limited, Standard Chartered Bank, and Westpac Banking Corporation were joint lead managers.

[Related: Pepper prices $675m RMBS]