Ratings boost for non-bank CRE lender

News followed “outstanding performance” of loans supporting the transaction

Ratings boost for non-bank CRE lender


By Melanie Mingas

Ratings agency Standard & Poor's (S&P) has upgraded its ratings for an Australian commercial property finance specialist, following continued strong performance.

International ratings agency S&P upgraded ratings on Thinktank Property Finance’s 2017 securitised bond issue of $300m, rating all five classes of notes below AAA following what the lender said was “continued outstanding performance” by the commercial loans supporting the transaction.

The news followed a similar upgrade in November last year on Thinktank’s 2016 transaction.  

“This latest ratings upgrade further enhances Thinktank’s reputation as a leading industry presence in the commercial and residential lending landscape and will be well received by those same institutional investors and others who are equally strong supporters of the Australian non-bank lending sector more broadly,” a spokesperson for the lender said.

“Such positive performance by Thinktank and other non-banks who also utilise international securitisation markets to fund their loan portfolios, ultimately feeds back into a more vibrant, progressive product and service proposition for brokers and their clients,” the spokesperson added.

S&P said the ratings reflect that “asset performance has been stable since inception, with a moderate level of loans past due and no losses to date”.

As of April 30, 2019, the outstanding asset balance stood at $224.7m and no loans were more than 60 days in arrears.

With brokers originating close to 100% of all Thinktank loans, the lender has advanced just shy of $2bn in mortgage finance since 2006. It has issued more than $1bn in rated securities to Australian and global institutional investors including banks, superannuation funds and insurance companies.

Thinktank lends up to $3m per security property and has an average loan size of $750,000 supported by industrial, retail, office and residential properties across Australia.

A statement from Thinktank added, “As traditional banks continue to wrestle with increased regulatory oversight and conservative responses in credit products and policy, the non-banks are proving to be relentlessly progressive on the back of good loan performance and confidence with their funding arrangements allowing them to continue to invest in better broker and borrower outcomes through innovation in technology, service and product.”

Looking forward, Thinktank expects activity in non-bank lending for commercial property to continue to climb, as the banks remain generally cautious. The lender said this “bodes well for brokers to increase their share of the [commercial] market”.


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