Non-bank closes first CMBS transaction

by Miklos Bolza14 Nov 2016
Commercial property lender Thinktank has successfully closed its first public commercial mortgage backed securitisation (CMBS) transaction of $280 million.
The milestone, which occurred on 4 November, represents the lender’s second pure small ticket CMBS transaction in Australia since 2007. It follows on from Thinktank’s first privately placed securitisation in July 2014.
“The interest registered by investors has genuinely exceeded our expectations and is indicative of the broad based demand that has developed for alternate assets and the associated yield they can offer,” said the lender’s CEO, Jonathan Street.
The Commonwealth Bank acted as arranger as well as joint leader manager along with Deutsche Bank.
“The success of this transaction has been made possible through the long standing support and guidance of our arranger and JLM, Commonwealth Bank along with key input from Deutsche Bank who have been closely involved with the business over the past three years,” said Street.
“We look forward to keeping in close contact with our expanded group of investors and progressing onto our next transaction in around twelve months’ time.”
Tim Richardson, head of Pacific ABS at Deutsche Bank, said the nature of Thinktank’s conservative SME commercial mortgage collateral makes it perfect for securitisation.
“The success of the upsized transaction and extent of investor engagement, both domestically and offshore, was certainly pleasing and positions the Thinktank SME CMBS program well for further issuance in 2017 and beyond as the business grows,” he said.
Thinktank’s portfolio of first mortgage commercial property advances which support the CMBS transaction includes 513 loans of an average size of around $545,800 and a weighted LVR of 64.2%.
The loan advances are predominantly to self-employed SME borrowers, comprising of 77.3% full documentation (including 15.2% self-managed superannuation fund borrowers) plus 22.7% carrying alternate verification requirements.
Finally, loans to property investors make up 53.6% of total advances while no loans were in arrears on the date of settlement.
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