Firstmac has completed a $1 billion RMBS deal which is the largest for an Australian non-bank lender since before the GFC.
Firstmac CFO, Mr James Austin, said the market acceptance of Firstmac’s largest RMBS issuance had been exceptional.
“To achieve a result of this size demonstrates Firstmac’s strategy of financing high quality loans online has gained significant traction,” Mr Austin said.
“It’s a great endorsement for Firstmac to have placed the largest non-bank RMBS deal since before the GFC shook the market.”
The Firstmac Mortgage Funding Trust Series 1-2015 transaction was successfully placed and priced in a deal arranged by Australia and New Zealand Banking Group, jointly led by Westpac Institutional Bank, nabSecurities, and JP Morgan Australia Limited.
A total of 22 investors participated in the transaction including 16 real money accounts.
This culminated in a fully tranched capital structure where:
1. the Class A-1 notes, $600 million rated AAA by S&P and Fitch, also benefit from 15% credit support and with a weighted average life of 2.9 years, priced at 1M BBSW +0.98%;
2. the Class A-2 notes, $250 million rated AAA by S&P and Fitch, has 15% credit support and with a weighted average life of 3.6 years, priced at 1M BBSW +1.15%;
3. the Class A-3 notes, $50 million rated AAA by S&P and Fitch, has 10% credit support and a weighted average life of 2.8 years, priced at 1M BBSW +1.35%;
4. the Class AB notes, $58 million rated AAA by S&P with a 5.5-year weighted average life, priced at 1M BBSW +1.95%;
5. the Class B notes, $27 million AA- rated by S&P with a 5.5-year weighted average life, priced at 1M BBSW +2.50%;
6. the Class C notes, $6.6 million A rated by S&P with a 5.5-year weighted average life, priced at 1M BBSW +3.00%;
7. the Class D notes, $6.6 million rated BB by S&P with a 5.5-year weighted average life, priced at 1M BBSW+5.50%; and,
8. the Class E notes for $1.8 million were retained by Firstmac as a demonstration of confidence in the credit quality of the online originated loans.
Mr Austin said Firstmac’s solid history of successful RMBS issuances had fostered investor interest over more than a decade.
“The Firstmac bonds have been well received by an investor market keen to take up an offering with a strong track record,” he said.
“Firstmac has demonstrated its ability to innovate and create opportunity in the home loan sector through the use of technology to capture market share from more traditional bricks and mortar lenders.”
It was the burgeoning strength of Firstmac’s online retail lender, loans.com.au Pty Ltd, that facilitated Firstmac’s capacity to achieve record-breaking RMBS deals.
“loans.com.au has set some records of its own in recent months, with loan applications doubling and settlements outstripping previous peaks,” Mr Austin said.
“The online lending model is very effective; it’s convenient for customers who prefer to do business online and it is efficient in terms of overheads.
“Typically, loans.com.auwrites high quality loans to borrowers with an average deposit of a third of the value of their home and is structured to be able to offer some of the most competitive interest rates in the country.”
Firstmac has issued more than $13 billion in RMBS since 2003.
Firstmac Limited is an independently-owned, Australian financial services provider with 35 years’ experience in home and investment loans. Firstmac has written in excess of 68,000 home loans in the past decade and manages approximately $6 billion in mortgages and $150 million in cash investments. Firstmac is a premier sponsor of the Brisbane Broncos.
Firstmac Limited is 100% Australian owned with over 30 years of experience in home and investment loans which makes us a great alternative to the major banks. Firstmac manages roughly $5 billion in mortgages and $150 million in cash investments through offices in Sydney, Melbourne, Brisbane, the Gold Coast and Singapore. Firstmac Limited has market-backed insurance products backed by international companies, such as Allianz Group and Ace Insurance Limited. International ratings agency Standard & Poor’s gives Firstmac its highest possible ranking (“strong”) for loan serviceability abilities.
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