Firstmac completes $300m auto ABS issue

Non-bank lender Firstmac has successfully completed a $300 million auto asset-backed security (ABS) issue.

The lender stated that the issuance had been priced at the “tightest margin across every tranche for all ABS transactions in Australia this year”.

The issue is the second auto ABS transaction for Firstmac after completing its inaugural trade this time last year.

James Austin, chief financial officer at Firstmac, commented that the successful transaction was a sign of the “quality of the auto loans that Firstmac has written” since it increased its focus on auto lending over recent years.

Mr Austin stated: “We had 23 institutional investors participate in the transaction, which is particularly high and demonstrates confidence in the high-credit-quality loans that we originate.

“This caps off a great year for Firstmac, particularly in the second half where we have been writing record volumes in both home and auto.”

Firstmac said that the issue price for Tranche A1 was just +137 over the Bank Bill Swap Rate.

The lender commented that the issuance continued its “groundbreaking practice” of detailing the amount of CO2 emissions from each car the ABS is secured against.

This practice was to prepare the lender to issue a “green” auto bond in the future that is secured only against electric vehicles with low emissions, targeting eco-focused institutional investors.

Firstmac said the issue secures its funding for auto lending “well into 2024”.

The auto ABS followed several residential mortgage-backed securities (RMBS) issued by the lender in 2023.

In October, the lender successfully priced an RMBS issue priced at over $500 million, which came after the lender’s successful $1.2 billion issue in August.

At the time, Mr Austin said the successful issuances were a sign of Firstmac’s “continued success in the sector”.

“With strong institutional investor support, this funding pipeline is really cementing our position as the pre-eminent lender of residential SMSF in Australia,” he added.

The lender confirmed that its $500 million issuance was to help fuel its expansion into the residential SMSF property lending sector, which it said had been notably overlooked by major banks.

Mr Austin commented: “Our residential SMSF product has evolved into a substantial part of our business and it’s no surprise. We bring competitive SMSF options and rates to a segment that has long been underserved.

“We believe in keeping things simple, including residential SMSF lending. That’s why we offer a hassle-free, low-fee product with both variable and fixed-rate options.”

[Related: Firstmac prices $500m RMBS issue]