La Trobe Financial has announced the successful completion of its second RMBS transaction for 2020, despite the ongoing economic uncertainty created by the COVID-19 pandemic.
The non-bank intends for the $500m RMBS tactical issuance to supplement the group's diverse funding program.
“We are pleased with the pricing this transaction achieved in a market that continues to carry significant uncertainty,” said La Trobe Financial CFO Martin Barry.
“The issue was 1.3x overbid…[which] confirms the strength of our RMBS program, business platform and the quality of underlying assets in what remains an unclear global investment environment.
“La Trobe Financial has remained open for business throughout the COVID-19 virus crisis and maintains substantial forward funding capacity alongside $488 million of shock absorber and regulatory capital.”
The group has been able to complete both of its 2020 issuances without direct support from the Australian Office of Financial Management (AOFM), despite having had the option to do so as the AOFM announced a $15bn Structured Financial Support Fund (SFSF) to support non-banks fund raising during the pandemic back in March.
“The proceeds of the issue will be used by La Trobe Financial to continue writing home and business loans for everyday Australians at a critical time in the history of our economy,” said Paul Brown, La Trobe Financial head of group portfolio management.
“We welcomed a significant large global investor to our 50 investor-strong RMBS program and are delighted by the interest we have received both offshore and domestically as we build out our diverse global investor base.”
Approximately 84% of the transaction was placed with institutional, real-money investors across the structure, while 59% was placed with international investors.