Brokers lead to record RMBS transaction at non-major

The challenger bank has successfully completed its largest ever RMBS capital raising thanks to strong third party support

Brokers lead to record RMBS transaction at non-major



The broker-led mortgage strategy at Tasmania based non-major MyState has led to strong investor appetite for the lender’s largest ever residential mortgage backed securitisation (RMBS) transaction.

Demand for the bank’s recent $400m capital raising – the sixth under the CONQUEST program – showed recognition of the strength and quality of the lender’s loan book, said group executive of broker distribution Huw Bough.

This follows from the last transaction in November last year. Eighteen investors from within Australia and overseas participated in this most recent capital raising.

“This transaction was the largest in the long history of the CONQUEST program, one third larger than the most recent transaction and elicited broader investor support than any of our previous transactions,” Bough told Australian Broker.

“Investors see our strong lending growth profile, recognise MyState as a regular issuer to the market and increasingly seek to benefit from participating in a program with exemplary credit performance and increasing geographic diversification.”

This support was also an endorsement of the bank’s broker-led growth strategy, he added.

“We have been working hard to be the bank of choice for brokers and have deliberately aligned our success with that of our brokers. This strategy is working well.”

Brokers have been responsible for 95% of MyState’s home loan growth over the past 12 months, Bough said.

“Our broker-led strategy has delivered sustained growth and greater geographic diversification.”

“Brokers are responsible for 95% of MyState’s home loan growth over the past 12 months. Contrast this with the second half of the 2014 financial year when the broker channel was responsible for 55% of home loan growth and the second half of the 2016 financial year 74% of home loan growth.”

This allows MyState to serve a broader geographic base and reduce concentration risk, he added. While almost 57% of MyState’s home loans were for properties in Tasmania in December 2015, this had reduced to 52% a year later.

“Over the same period the value of MyState Victoria mortgages increased 28% and the value of MyState NSW mortgages jumped 49%,” Bough said.

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Specialist lender closes $250m RMBS transaction

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