Non-bank lender issues $1.25bn RMBS

by Madison Utley18 May 2020

La Trobe Financial has “effectively reopened” Australian debt capital markets with a $1.25bn RMBS raising.

It was the largest securitisation around the world since COVID-19 took hold in March and, according to the group, has confirmed Australian residential mortgages as a global safe harbour investment.

La Trobe not only saw support from Australian institutional investors, but global investment houses in Asia, the United States and Europe.

While the federal government’s Australian Office of Financial Management (AOFM) was closely involved with the deal, investor demand saw that no AOFM investment was required.

La Trobe chief treasurer and strategy officer Martin Barry said, “We welcomed three new investors to our already 46 investor-strong RMBS program and are delighted by the interest we have received both offshore and domestically as we build on our diverse investor base.

“We remain good stewards of other people’s capital and this enables us to obtain and maintain the trust of our clients – this is the real asset of the company.”

The proceeds of the issue will be used to continue writing home and business loans for Australians at a critical time in the history of the country’s economy.

“With this RMBS transaction we achieved competitive pricing, notwithstanding increased levels of market supply and note participation from 15 domestic and seven international investors from Europe, USA and Asia,” said Barry.

With $11bn of assets under management, La Trobe Financial has been responsible for over $25bn worth of investment mandates of varying structures since being founded in 1952. La Trobe has now issued $6.17bn of RMBS to a range of Australian and international investors.

“The pricing and level of over-subscription reflects a strong endorsement of La Trobe Financial’s high quality assets, expertise and long, consistent track record as Australia’s oldest diversified wealth manager,” said Richard Parry, La Trobe head of group portfolio management.

“With current trend loan originations now at $10+ billion per year, this was a practical step to complement current institutional mandates and our nationally and internationally awarded $5 billion retail Credit Fund. We have built a disciplined investment strategy and continue to deliver outstanding returns for all of our investors.”