Pepper Money prices second public securitisation

Non-bank lender Pepper Money has priced a $675.9 million car and equipment asset-backed security (ABS) transaction, titled SPARKZ 8. It is due to settle on 18 April 2024.

This marked the second public securitisation transaction for the non-bank lender this year, having raised $1.4 billion in the securitisation markets calendar year to date.

The ABS program SPARKZ began in 2019 and supports the ongoing growth of Pepper Money’s Asset Finance business, which now contains over $6 billion in assets under management, according to the lender.

Pepper Money confirmed that the portfolio is made up of car receivables and other asset types including marine and recreational equipment, which is distributed via mortgage brokers, online auto brokers, commercial and consumer brokers, car dealerships, salary packagers, and original equipment manufacturers.

Pepper Money chief executive Mario Rehayem commented: “We started our Asset Finance business in late 2014 and have since grown it to become a leading non-bank asset finance lender in Australia.

“Pepper Money undertook its first SPARKZ transaction in 2019 – we are now onto our eighth and have raised more than $5.4 billion from this program alone – a testament to the ongoing investor support for Pepper Money and our Asset Finance business.

“SPARKZ 8 will support the ongoing originations growth of our Asset Finance business.”

Adding to this, Pepper Money’s treasurer Anthony Moir said investor interest in the transaction was strong, with the non-bank lender experiencing “favourable market conditions”.

“It was encouraging to see a good mix of both domestic and offshore investors participate in the transaction and we thank both our long-term investors and new investors to the SPARKZ program for their participation,” Moir said.

NAB was the arranger and joint lead manager for transaction, with BofA Securities; Royal Bank of Canada, Sydney branch; Societe Generale; and Westpac as joint lead managers.

Pepper Money’s first transaction for the year, PRS39, was comprised of both prime and nonconforming mortgages priced at $750 million, which settled on 28 February 2024.

According to the lender, the funds raised under PRS39 would be used to continue to support Pepper Money’s nonconforming mortgages business growth in the country.

Rehayem said at the time that the lender’s ability to raise $750 million under PRS39 was a “testament to the strong investor support for Pepper Money’s securitisation programs”.

[RELATED: Pepper Money secures first RMBS for 2024]