La Trobe Financial has announced a record RMBS transaction, pricing a deal at $1.25 billion. It is the biggest deal that the group has been able to achieve since before the Global Financial Crisis.
The transaction is La Trobe’s first of 2021 and represents the confidence that they can now command from investors: the group have fully repaid $30 billion in debt since 2014 and are continually progressing new business in the home loan market.
All notes were oversubscribed, displaying how much confidence funding houses have in La Trobe.
In particular, the non bank’s strength in writing home loans to self-employed Australians, a traditionally secure yet underserved part of the mortgage marketplace, has underwritten their reputation.
Their average LVR is 71%, and no mortgages are priced at over 80% LVR, placing La Trobe’s risk as lower than many in the non bank sector.
“We are very pleased with the record pricing this RMBS transaction has achieved, proving the ongoing appetite of our global investor base for our high quality assets,” said La Trobe Financial CFO Martin Barry.
“The proceeds of this $1.25 billion issue will be used by La Trobe Financial to continue writing home and business loans for everyday under-served Australians, at a time when credit formation has never been so vital.”
“With $12 billion of assets under management, La Trobe Financial is well placed to support the recovering economy and has co-invested $460 million of shock absorber and regulatory capital alongside investors.”
This is the fourth major RMBS transaction of the last few weeks for the non bank sector, which has been booming as the Australian housing market reaps the benefits of a strong start to the year.
On Wednesday, Resimac made a $1 billion transaction, while late last week, Firstmac made the largest ever RMBS transaction for an Australian non bank, priced at $2 billion. Pepper Money have also recently passed a deal worth $750 million.
