Firstmac rides volatility for RMBS tranche

by BN21 Dec 2011

Non-bank lender Firstmac has priced a tranche of residential mortgage backed securities worth $300m, though it has come at a cost.

In a deal finalised yesterday, the placement includes $99.4m sourced from the government's Australian Office of Financial Management (AOFM), and $199.85m from external investors.

FirstMac dhief financial officer James Austin said Firstmac had overcome "volatile economic times arising from issues in Europe" to place the deal.

“Funding costs across the industry globally have risen significantly over the past 12 months with this transaction pricing 0.30% wider than a similar transaction placed last year,” Austin said.

“Europe continues to provide an uncertain environment. Given these risks, it is prudent to maintain the long-term funding profile of our balance sheet even if this comes at a higher cost.”

Austin said the benefits of the government's RMBS buying programe via the AOFM would be passed on to home buyers and investors.