Thinktank announces largest CMBS securitisation to date

by Madison Utley22 Oct 2020

Thinktank has successfully closed its sixth and largest commercial mortgage backed securitisation (CMBS) transaction of $600m, bringing the total of bonds now issued by the non-bank to $2bn.

The result follows the group’s $350m CMBS transaction in November 2019, furthering the company’s reputation as a prominent capital markets issuer in the commercial property asset class.

“The support demonstrated by existing and new institutional investors from both on and offshore is indicative of the strong, broad based demand that has continued to develop for alternate asset backed issuance,” said Thinktank CEO Jonathan Street.

The rated notes were placed across a total of 16 institutional investors with both onshore (77%) and offshore (23%) accounts participating. Real money investors represented 83% of the total amount issued, while banks accounted for 17%. The transaction was 1.4x over-subscribed representing bids in excess of $850m.

“This transaction has been an excellent result amid challenges in the market and allows Thinktank to continue on its growth path and maintain the orderly supply of credit into the critical SME and self employed sectors of the economy,” Street added.

The pool of 1,035 first mortgage loans with an average size of $580,000 was comprised of 27% industrial properties, 16% retail, 9% office, 3% mixed use commercial and 45% residential.

Additionally, 86% of properties were located in metro areas with 14% in non-metro areas.

New South Wales was the most prominent state with 53% followed by Victoria with 28% and Queensland at 11%.

Self Managed Superannuation Fund (SMSF) borrowers accounted for 27% of loans while the weighted average Loan to Valuation Ration (LVR) was 66.5%. Just under 53% of loans were to investors with the balance to owner-occupiers. The vast majority of loans were on P&I repayment at 66%, with just 34% in an interest only period. Less than 0.5% of borrowers had any form of adverse borrowing history.