Specialist lender closes $250m RMBS transaction

The non-bank’s third transaction in the past 12 months correlates with a growing market presence for the firm

Specialist lender closes $250m RMBS transaction



Specialist lender Bluestone Mortgages has announced the closing of yet another $250m residential mortgage backed security (RMBS) transaction – the third in a period of 12 months.

This latest transaction, Sapphire XVI, brings the total issuance for the company to more than $650m throughout the past year. This is the 16th transaction for Bluestone in Australia over its lifetime with the most recent two occurring in May and November last year.

“Our goal is to consistently deliver a best-in-class specialist lending experience for brokers, our customers and to rebuild the Sapphire RMBS program,” said Bluestone CEO Campbell Smyth. “I am delighted with the progress we have made but there is still much for us to achieve and the team is excited about the challenge.”

A total of 16 investors, domestic and offshore, were involved in the transaction. The overall portfolio composition was in line with past deals containing 17.6% investor loans, 17% interest only loans and 16.8% non-metro exposures.

“The success of this strategy is evidenced through sustaining a year-on-year growth rate of over 100% since our return to market in 2013,” Smyth said.

“This is a result of channelling our efforts to support start-ups and self-employed borrowers, being in tune with their evolving demands and consistently providing products that are highly appealing to the sector.”

Bluestone’s vision was to be recognised as an industry leading specialist lender with an added focus on brokers’ outcomes and clients, he told Australian Broker. This comes down to access to BDM teams and credit teams and ensuring brokers were sufficiently resourced in terms of handling inquiries and queries.  

“We see RMBS as a function of being a best-in-class specialist lender. By that I mean RMBS is one of the mechanisms by which we fund our business and our loan book. The fact that we’ve managed to transact three times in the past 12 months and raise $650m from these transactions is really a reflection of recognition of the market.”

For the future, the focus would be maintaining or improving the areas in which Bluestone delivers value, Smyth said, including ensuring that BDMs are knowledgeable, capable and available to brokers.

“Similarly in terms of credit, we see providing brokers access to credit as a win-win. We get to understand a deal better and the broker gets to understand Bluestone and our thinking better. This means that the broker is more likely to have a deal approved when they put it in.”

Finally, ensuring a good turnaround time on deals was a priority. Instead of providing a simple time to approval – which may not work under certain circumstances – Smyth said the focus was on genuinely making the deal work and getting it settled as quickly as possible from start to finish.

He continued, saying that Bluestone would try to get back to brokers within 24 hours.

“However for us the point of providing access to the credit team is not to ensure that brokers get a 24 hour turnaround on their first contact back; it’s really to ensure that they get the deal settled as quickly as possible.”

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