Thinktank's $500 million CMBS issue closed

The lender's total bonds issued now at $6 billion

Thinktank's $500 million CMBS issue closed


By Mina Martin

Thinktank, a specialist commercial and residential property lender, has announced the successful completion of its ninth commercial mortgage-backed securitisation (CMBS) issue for $500 million.

The latest transaction, which was Thinktank’s thirteenth securitisation overall, took the lender’s total bonds issued to $6 billion, “confirming the company’s reputation as a prominent capital markets issuer and mortgage secured lender to Australian self-employed and SME borrowers,” the non-bank said in a media release.

“The participation of 23 institutional investors (including two new investors), split between domestic (57%) and offshore accounts (43%) for this $500 million deal, illustrates continuing strong support for the company’s dual mortgage-backed wholesale funding programs amid challenging conditions for Australian issuers,” Thinktank CEO Jonathan Street (pictured above) said.

Global ratings agency S&P assigned the final ratings for the transaction.

Pricing was communicated across the structure down to the F Notes with the Class A1 Notes being set at a margin +1.55% higher than the 30-day bank bill swap rate and the Class A2 Notes at +2.35% over the 30-day bank bill swap rate, with both tightening by 0.1% inside initial price guidance at launch on the back of strong investor interest.

Real money investors accounted for 59% of the total amount issued, with bank balance sheets representing the remaining amount. The transaction was 2.1 times over-subscribed representing bids valued at a little over $1 billion. The pool of 776 first mortgage loans had an average size of $644,324, while 85.1% of properties were in major metropolitan areas and 14.9% in highly urbanised non-metro locations.

“While the continuing impacts of higher interest rates are being progressively felt throughout the economy and the demand for credit has certainly begun to soften, our outlook for credit performance remains cautiously positive at this time and we are keen to maintain our long-term support of SME and self-employed borrowers seeking mortgage finance solutions,” Street said.

The pool was comprised by 63% Full Doc and SMSF loans and 36.6% alternate verification. The largest property type was industrial security, accounting for 39.8%, while retail, strata office, and professional suites combined accounted for a total of 38.9% with standard residential properties at 20.1%, Thinktank said.

NSW was the most prominent borrower state at 41.2%. This was followed by Victoria at 33.6% and Queensland at 13.1%.

The non-bank also revealed self-managed superannuation fund (SMSF) borrowers comprised 30.2% of loans and the further 65.2% accounted for the weighted average LVR, with 49.8% of loans extended to investors and the balance to owner-occupiers. The majority of loans were on principal and interest repayment at 65.6% with 34.4% starting under an interest-only period before converting to principal and interest.

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