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Resimac settles $1.5bn RMBS deal

by Malavika Santhebennur10 minute read
Resimac settles $1.5bn RMBS deal

The non-bank lender has announced the completion of its largest RMBS deal since 2006 valued at $1.5 billion, and its first transaction for 2021.

Resimac has announced the financial close of the Resimac Premier Series 2021-1 prime residential mortgage-backed securities (RMBS) dual currency transaction.

The $1.5 billion deal comprises 12 per cent of its total funding of home loan assets under management ($12.9 billion as at 31 December 2020), and represents the non-bank lender’s largest deal since 2006, Resimac said.

Commenting on the RMBS deal, Resimac group treasurer Andrew Marsden said the non-bank lender’s funding depends strongly on its global securitisation program, and added that investor appetite for the program has remained strong.

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“We are looking forward to bringing further bond transactions to the market this year, and expect market conditions to remain supportive to our growth objectives throughout 2021.

“With heightened home loan activity expected over the remainder of 2021, our funding initiatives should provide a strong platform to take advantage of opportunities in the Australian mortgage market.”

He also said that the deal was “heavily” oversubscribed, and added that the non-bank lender expects issuance conditions to support its growth objectives throughout 2021.

“Overall deal economics improved by 30 bps from December’s Premier 2020-3 transaction and 55 bps from COVID peak in June’s Premier 2020-2 trade,” he said.

“We are looking forward to bringing further bond transactions to the market in 2021. In conjunction with lower-term RMBS margins, our short-term funding costs are reducing as wholesale lending markets are repricing.”

According to Resimac, the Australian dollar senior notes were priced at 80 bps, while the US dollar notes were priced at 70 bps, which it said are the “tightest levels achieved by a non-bank since the GFC, providing net interest margin tailwinds into FY22”.

In December 2020, Resimac entered the Japanese capital markets with a $1-billion RMBS deal, marking the first RMBS transaction under its program to offer a yen-denominated tranche.

This followed its first RMBS transaction in the New Zealand market in September 2020, a $1 billion non-conforming Bastille RMBS transaction in July 2020, and its first RMBS transaction since the onset of the coronavirus in May 2020.

In February 2021, the non-bank lender reported an 88 per cent profit increase and a 14 per cent increase in its loan book in the first half of the 2021 financial year, despite a drop in the volume of new settlements.

[Related: Non-bank moves to fully acquire IA Group]

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