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Non-bank closes $300m CMBS transaction

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Reporter 5 minute read

A finance provider has announced the closing of its third commercial mortgage-backed securitisation transaction, bringing the total volume of bonds issued by the non-bank to $694 million.

Commercial property finance provider Think Tank Group (Thinktank) has successfully closed its third commercial mortgage-backed securitisation (CMBS) transaction of $300 million.

The transaction follows a similar $280 million transaction made in November.

Thinktank chief executive officer Jonathan Street noted that the result was reflective of increased demand for alternative asset-backed insurance.

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“The support demonstrated by existing and new institutional investors from both on and offshore is indicative of the strong, broad-based demand that has developed for alternate asset-backed issuance and the associated yield it offers,” Mr Street said.

The transaction has been assigned final ratings by Standard and Poor’s, with the $180 million Class A1 Notes and the $34.2 million Class A2 Notes assigned an AAA rating.

The $23.1 million Class B Notes, $23.7 million Class C Notes, $15 million Class D Notes, A$12.9 million Class E Notes and $5.7 million Class F Notes have ratings of AA, A, BBB, BB and B, respectively.

Also provided in the transaction were unrated but credit-aligned offerings of Class G Notes of $2.4 million and Class H Notes of $3.0 million.

Pricing was disclosed across the structure, producing a weighted average margin above the 30-day bank bill swap rate (BBSW) of +234 basis points.

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Priced at BBSW1M +145bps, the Class A1 notes have a weighted average life of 1.9 years, with the most senior-rated notes placed across a number of major institutional investors, with onshore and offshore accounts participating.

The Commonwealth Bank of Australia (CBA), along with Westpac, acted as “arranger” and “joint lead manager” during the transaction.

The Thinktank CEO thanked the two major banks for their support, saying: “The success of this transaction has been made possible through the long-standing support and guidance of our Arranger and JLM, Commonwealth Bank, along with added strength from Westpac as a new supporter of the business.

“We look forward to keeping in close contact with our expanded group of investors and progressing onto our fourth transaction within the next 12 months.”

CBA’s director of debt markets securitisation, Cullen Hughes, and Westpac’s director of structured finance at Westpac Institutional Bank, James Kanaris, echoed Mr Street’s sentiment.

“We’re pleased to again be involved as arranger, following on from the success of Thinktank’s first public transaction last year, and to continue contributing to Thinktank’s growing presence in Australian capital markets,” Mr Hughes said.

Mr Kanaris added that Westpac is committed to facilitating growing demand from customers for CMBS.

“Westpac is delighted to have joint lead managed Thinktank’s second public transaction and its largest issue to date,” Mr Kanaris said.

“Asset-backed investors continue to be attracted to alternative collateral classes such as small ticket CMBS, with this transaction contributing to the ongoing diversification of Australian collateral offered to the market.”

Since its launch in 2016, the commercial finance provider has advanced more than $1.2 billion in mortgage finance to Australian small- to medium-sized (SMEs) enterprises.

[Related: Thinktank — Growing with brokers]

Non-bank closes $300m CMBS transaction
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