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Non-banks down but not out: Pepper

by Staff Reporter5 minute read
The Adviser

Jessica Darnbrough

Australia’s non-bank players will remain on the back foot for some time, one industry stakeholder has claimed.

Speaking to The Adviser, Pepper’s chief executive officer Patrick Tuttle said for the non-bank sector to truly compete, the capital debt markets needs to open up – a developement that is yet to occur.

“For the non-bank lenders to truly compete, we need to have an active and liquid RMBS market. At the moment, things are not where they need to be,” he said.

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“There have only been three RMBS deals this year, which is not great.

“That said, three deals in five months is a step in the right direction. If the market continues on this trajectory, then we could see the non-bank sector start to return to its former glory.

Earlier this month, Pepper priced its first RMBS deal for 2012 and the first non-conforming RMBS transaction in Australia since mid-2011.

While the pricing was quite high, Mr Tuttle said he was happy to see the issue was well supported by a total of 11 accounts, including 9 domestic investors and 2 offshore investors, many of whom are repeat buyers.

“This transaction once again shows Pepper’s strength as a quality originator, servicer and issuer and demonstrates conclusively that there is significant demand in the market for paper of this type.”

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