The deal compares favorably with Firstmac’s last transaction in May which priced at 150 basis points over the Bank Bill Swap Rate.
This transaction was also $100 million larger than the previous $500 million transaction.
Firstmac CFO James Austin said the success of the deal reflected the confidence of major institutional investors in the quality of Firstmac’s online loan book, its tough credit policies and its effective self-regulation.
“The RMBS market is functioning well and we were pleased by the large number of institutional accounts that participated in our transaction, including several new accounts to our name,” Mr Austin said.
“Firstmac transactions are being compared favorably to bank issuers given Firstmac delivers a wider margin, better arrears, and almost double the credit enhancement. It is a compelling relative value proposition.”
The transaction takes Firstmac’s RMBS issuance since 2003 to more than $16 billion. Its most recent prior issues were a $500 million issue in November 2015 and $1 billion in May 2015.
Mr Austin said the issue had been well supported by domestic investors, with a total of 21 investors participating in the transaction which was jointly led by Australia and New Zealand Banking Group, Macquarie Bank Limited, nabSecurities Australia, and Westpac Institutional Bank.
The Firstmac Mortgage Funding Trust Series 3-2016 was successfully placed and priced in a deal arranged by Australia and New Zealand Banking Group.
This culminated in a fully tranched capital structure where:
1. the Class A-1 notes, $510 million rated AAA by S&P and Fitch, benefit from 15% credit support and with a weighted average life of 3.0 years, priced at 1M BBSW +1.35%;
2. the Class A-2 notes, $42 million rated AAA by S&P and Fitch, has 8% credit support and a weighted average life of 3.8 years, priced at 1M BBSW +1.90%;
3. the Class B notes, $35.4 million AA rated by S&P with a 5.2-year weighted average life, priced at 1M BBSW +2.45%;
4. the Class C notes, $6.6 million A rated by S&P with a 5.2-year weighted average life, priced at 1M BBSW +3.25%;
5. the Class D notes, $4.56 million rated BB by S&P with a 5.2-year weighted average life, priced at 1M BBSW+5.80%; and,
6. the Class E notes for $1.44 million were retained by Firstmac as a demonstration of confidence in the credit quality of the online originated loans.
Firstmac Limited is Australia’s largest non-bank lender, with more than 38 years’ experience in home loans. Firstmac has written in excess of 100,000 home loans in the past decade and manages approximately $8 billion in mortgages and $250 million in cash investments. Firstmac is a premier sponsor of the Brisbane Broncos
Media enquiries to Duncan Macfarlane on 0434 184 264