Australian Finance Group has locked in a major funding milestone, with the aggregators stating the deal signalled strong confidence in mortgage credit.
Australian Finance Group (AFG) announced on Friday (13 February) that it had issued a $1.2 billion prime residential mortgage‑backed securities (RMBS) transaction through its lending arm, AFG Securities.
The issue, which represents the group’s largest securitisation to date and its 20th public RMBS since inception, is scheduled to settle on 26 February 2026.
Record size and strong bid
AFG Securities took the latest prime RMBS deal to $1.2 billion after its books comfortably supported an increase from the original $750 million pool.
Chief executive David Bailey described the outcome as a major achievement for the program, saying the upsizing reflected “strong demand across all tranches” and underlined the depth of investor support for both AFG and the broader Australian RMBS asset class.
More than 30 domestic and offshore accounts participated in the transaction, including four investors that were new to the AFG program.
Bailey said the breadth of the order book gave the issuer flexibility on size while maintaining tight execution.
He noted that the latest deal achieved “competitive pricing” in line with AFG’s $1 billion RMBS completed in October 2025 – signalling that spreads have held firm despite the step‑up in volume.
Funding stability and loan book growth
Bailey emphasised that repeat term deals of this scale now sit at the core of AFG’s funding strategy.
He said the RMBS transactions “underpin our funding program and provide cost of funds certainty for a significant proportion of our loan book."
Positioning AFG as both a major originator and a large‑scale distributor of mortgages, Bailey argued that the dual role delivered real‑time visibility into borrower behaviour and emerging trends in the home loan market.
“That depth of expertise directly informs our credit policies and lending practices, which sit at the heart of our diversified earnings model,” he said.
Confidence in Australian prime RMBS
AFG’s latest transaction follows a series of upsized prime RMBS deals from non‑bank and aggregator lenders over recent years – pointing to a deep investor bid for Australian mortgage risk.
Bailey said the successful execution of the transaction reinforced the “positive sentiment towards Australian RMBS more broadly” and showcased AFG Securities’ ability to deliver large, well‑supported deals.
“We’re thrilled to have successfully upsized this record‑setting transaction and remain focused on delivering highly competitive home loan solutions for our brokers and their clients, while continuing to provide compelling opportunities for RMBS investors,” he said.
[Related: AFG urges budget action to tackle mortgage market power]
