Prime performance as non-bank prices RMBS

by BN09 Nov 2012

A non-bank has demonstrated investor demand for Australian RMBS in pricing its third issue since late 2010.

Pepper Home Loans priced the $500m RMBS issue earlier this week, utilising for the first time prime loans originated by GE Capital, which Pepper acquired in 2011.

“The transaction demonstrates that there is genuine investor demand for Australian RMBS paper from quality non-bank issuers with strong servicing and asset performance history," CEO Patrick Tuttle said.

The issue was Pepper's third since late 2010, and did not require investment from the Australian Office of Financial Management.

The issue supported by 11 accounts, including eight domestic investors and three offshore investors, some of whom have previously participated in Pepper’s non-conforming issues.

Group treasurer Todd Lawler said Pepper anticpates doing further issues backed by GE-originated collateral over time.

"We will tap into both the US and Australian markets as conditions permit," Lawler said.