La Trobe Financial has announced $1.25 billion residential mortgage-backed security raising (RMBS), which is going to be one of the largest securitisation globally since the COVID-19 took hold in March and will ‘re-open Australian debt capital markets’, the firm claimed.
La Trobe said that the strength of support was seen in the strong level of over-subscription across all notes and that while the Federal Government’s Australian Office of Financial Management (AOFM) was closely involved with the deal, investor demand was such that no AOFM investment was required.
The proceeds of the issue would be used by La Trobe Financial to continue writing home and business loans for ordinary Australians at a critical time in the history of our economy.
According to Martin Barry, La Trobe Financial’s Chief Treasurer & Strategy Officer, there was both offshore and domestically interest from a diverse base of investors, with another three new investors to its already 46 investor-strong RMBS program.
“We remain good stewards of other people’s capital and this enables us to obtain and maintain the trust of our clients – this is the real asset of the company,” he said.
“With this RMBS transaction we achieved competitive pricing, notwithstanding increased levels of market supply and note participation from 15 domestic and seven international investors from Europe, USA and Asia.”
La Trobe Financial said that it issued $6.17 billion of RMBS to a range of Australian and international investors and its RMBS program saw continued support from repeat investors and a progressively widening investor base with each transaction, reflecting well on the diversity and resilience of La Trobe Financial’s funding base, which included institutional mandates and Australia’s largest Credit Fund, representing the most diversified funding base in the non-bank sector.
“The pricing and level of over-subscription reflects a strong endorsement of La Trobe Financial’s high quality assets, expertise and long, consistent track record as Australia’s oldest diversified wealth manager,” Richard Parry, Head of Group Portfolio Management at La Trobe Financial commented.
“With current trend loan originations now at $10+ billion per year, this was a practical step to complement current institutional mandates and our nationally and internationally awarded $5 billion retail Credit Fund. We have built a disciplined investment strategy and continue to deliver outstanding returns for all of our investors.”
According to the company, approximately 88% of the transaction was placed with institutional, real-money investors across the structure.
The Arranger of the deal was Macquarie Bank, while Joint Lead Managers included the Commonwealth Bank of Australia, National Australia Bank, The Hongkong and Shanghai Banking Corporation, Macquarie Bank, Natixis and Citi. Wells Fargo was a Co-Manager.