Australia’s non-bank lenders are ramping up activity in the securitisation market, signalling preparations for a growth surge in the coming months.
Several non-bank lenders have completed or priced major securisation transactions in the past week, collectively raising billions in funding to support lending expansion.
Non-bank lender Pepper Money reported strong investor demand for its second public securitisation of 2025, PRS41, which was upsized to $1.25 billion.
The transaction, which settled on 25 September, was a residential mortgage-backed securities (RMBS) transaction incorporating a mix of prime and non-conforming mortgages, with funds earmarked to support the lender’s mortgage business growth across Australia.
“PRS41 is our second public securitisation this year,” said CEO Mario Rehayem. “Our ability to upsize it and raise $1.25 billion, with tranches again significantly oversubscribed, is an ongoing testament to the strong investor support for Pepper Money's securitisation programs.”
Rehayem highlighted Pepper Money’s long history in debt markets: “We have [a] long-standing (25+ years) track record in debt capital markets. I am proud to celebrate reaching the milestone of completing 42 non-conforming public RMBS since our first in 2003 raising in excess of $26.9 billion from our PRS program alone and how we continue to demonstrate our ability to successfully manage through all economic cycles.”
Treasurer Anthony Moir added: “The strong ongoing support from debt capital market investors for our issuances demonstrates the strength and longevity of Pepper Money’s relationships and our ability to continue to fund Pepper Money’s ongoing growth.”
Meanwhile, Wave Money marked a milestone with its inaugural public RMBS transaction, the $400 million Wave Money Bondi 2025-1 issuance, backed by a mix of prime and non-conforming loans secured by registered first-ranking mortgages on residential property across Australia.
The deal, supported by National Australia Bank (NAB) and saw Deutsche Bank take the role as sole arranger and joint lead manager, was reportedly made to help Wave Money further meet the needs of its broker partners.
“This is a significant milestone in Wave Money’s growth journey,” said John Flavell, founder and managing director of Wave Money.
“Completing our first public RMBS transaction positions us strongly for the future and enhances our ability to continue meeting the needs of our broker partners and their clients.
“Without the ongoing support of our broker partners, milestones like this wouldn’t be possible. Their trust in Wave Money drives us to keep delivering flexible, commonsense lending solutions that genuinely support their clients.”
Similarly, the lending arm of wholesale aggregator AFG, AFG Securities, announced it had successfully priced a $1 billion public RMBS issue, upsized from an initial $500 million.
The deal, the 19th in AFG’s public RMBS program, is set to settle on 2 October.
It reportedly drew interest from 32 investors, including four new participants.
“This represents AFG’s equal largest placement to date. The deal pricing tells a very positive story for Australian RMBS, with our AAA note pricing at 95 basis points, 25 basis points inside our last public Prime RMBS,” said AFG CEO David Bailey.
“This expertise informs our credit policies and lending practices, which are fundamental to our diversified earnings business model. We are very pleased with the successful upsizing of this transaction and remain committed to offering a competitive suite of home loan products to our brokers and their clients, as well as sound investment opportunities to participants in the RMBS market.”
The surge of RMBS transactions across Australia’s non-bank lenders comes as the market moves into a growth phase, with a record proportion of brokers using non-bank lenders to fulfil borrower needs.
The property and mortgage market are both expected to boom this spring, driven by increased demand amid a falling rate environment and the expansion of the First Home Guarantee Scheme this week.
[Related: Brokers embrace non-banks as sector usage hits record high]
