Pepper Money raises $750 million in new deal

Sets up seventh public securitisation in 2022

Pepper Money raises $750 million in new deal


By Jayden Fennell

Pepper Money Limited has priced a $750 million residential mortgage-backed security transaction that will settle on October 13.

The non-bank lender said the transaction was designed to optimise the funding of its Australian mortgage originations and is its third non-conforming PRS deal for 2022.

Pepper Money’s PRS program includes a mix of non-conforming and prime mortgages.

“This is our seventh public securitisation in 2022, bringing the total funds we’ve raised year-to-date to $5 billion,” said Pepper Money CEO Mario Rehayem (pictured above).

“Our ability to continue to raise funds despite the recent tougher market conditions reflects debt investor confidence in our capacity to manage throughout the economic cycle and our strong performance track record."

Pepper Money’s treasurer Anthony Moir said the non-bank has completed 54 securitisation transactions since 2003.

“We have raised over $33 billion via our four programs which include Pepper-Prime, PRS, Pepper-Social and SPARKZ,” Moir said.

“The strong ongoing support from debt capital market investors over the past two decades for both Pepper Money’s prime and non-confirming issuances demonstrates the strength and longevity of our relationships and our ability to continue to fund Pepper Money’s sustainable growth regardless of market conditions.”

National Australia Bank was the arranger and joint lead manager for the security transaction. Commonwealth Bank of Australia, Macquarie Bank Ltd and Westpac Banking Corporation were the joint lead managers for the transaction.

Pepper Money priced its first social bond in June by raising $300 million.

This was the fourth public securitisation transaction completed by the non-bank during FY21/22 and brought the total amount it had raised in the securitisation markets to $2.5 billion. This social bond raised provided Pepper Money with funding to finance loans that deliver positive social outcomes.

Pepper Money also priced a $700 million auto asset-backed security transaction under the SPARKZ program in May by upsizing from $600 million on the strength of investor support.

It was Pepper Money’s third public securitisation transaction for calendar year 2022 and funds raised under this transaction helped to support the continued growth of the asset finance business.

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