Firstmac completes $1.3bn RMBS raising

by Duffie Osental10 Jul 2020

Non-bank lender Firstmac Limited has announced its completion of a $1.3 billion RMBS raising, with over $2 billion in orders.

In a statement, Firstmac said that the issue was oversubscribed “from an early stage” and was supported by 31 institutions.

“This issue has received record support, partly because investors had built up cash in recent months as they waited for clarity around COVID-19 impacts to the economy,” said James Austin, chief financial officer at Firstmac. “Our regular monthly reporting of COVID-19 exposures and experience across our portfolio has been well received in the market, creating confidence for institutions to invest.”

According to Austin, the roadshow for the RMBS issue was the first to be done entirely online, as COVID-19 travel restrictions made the usual face-to-face meetings throughout Europe, Asia, and the US impossible.

“This was a completely digital international roadshow, with more than 20 Zoom meetings and we were pleasantly surprised by how effective it was while being much more efficient than travelling around in person,” said Austin. “With no end in sight for international travel restrictions, it seems that our investors will be shopping online – just like our customers – for the foreseeable future.”

In another adaptation to the situation created by the COVID-19 pandemic, the RMBS issued by Firstmac were described as “COVID-free” as they did not include any mortgages impacted by hardship stemming from the pandemic.

The raise comes in the same week that Firstmac reduced interest rates on flagship home loans in both its third-party and retail channels. Austin said the raising would provide funding for Firstmac to continue to compete strongly in the prime mortgage space.

The latest raise brings the total amount of RMBS issued by Firstmac in 2020 to $2.3 billion. The transaction was arranged by National Australia Bank, together with joint lead managers ANZ Banking Group, JP Morgan Securities Australia, Standard Chartered Bank, and Westpac Banking Corporation.