La Trobe's RMBS boosts lending capacity

Bernard Kellerman Debt capital markets

Diversified wealth manager and non-bank lender La Trobe Financial has disclosed the pricing for its latest residential mortgage backed securities issue, which it said attracted strong levels of over-subscription across all notes.

The La Trobe Financial Capital Markets Trust 2019-2 has raised A$1.25 billion from the sale of RMBS notes "at a competitive pricing". This was in part due to a roadshow that attracted strong interest among Australian and offshore investors, according to Martin Barry, La Trobe Financial’s chief treasurer and strategy officer.

Details of the main notes' pricing and underlying collateral were:

•    $209 million A1S notes: priced at a coupon of 75 basis points over Bank Bill Swap Rate, with a weighted average life of 0.4 years;
•    $666 million A1L notes –135 basis points over BBSW with a weighted average life of 2.8 years;
•    $160 million A2S have a weighted average life of 1.4 years', pricing was 165 basis points over BBSW;
•    $75 million A2L notes, with a weighted average life of four years, priced at 185 basis points over BBSW; and
•    pricing on the B to F notes ranged from 2.2 per cent to 7 per cent over BBSW.

Barry said the notes were taken up by fifteen domestic and seven international investors from Europe, USA and Asia, including Japan. He disclosed that La Trobe has added three new investors to the 46 already participating in the company's RMBS program.

National Australia Bank was arranger of the deal, while joint lead managers included  Commonwealth Bank of Australia, The Hongkong and Shanghai Banking Corporation, Macquarie Bank, Natixis, United Overseas Bank and Westpac.

La Trobe Financial, with $9 billion assets under management, has now issued just shy of $5 billion via RMBS transactions with a range of Australian and international investors.

Its RMBS program has seen continued support from repeat investors and a progressively widening investor base with each transaction. This funding base, which includes institutional mandates and Australia’s largest credit fund, represents the most diversified funding base in the non-bank sector, La Trobe asserted in its media announcement.

In December 2017, New York-based Blackstone, one of the world's largest private equity funds, and a property lender in its own right, took an 80 per cent stake in the Victorian-based La Trobe in a deal that was tipped to double the local non-bank lender's $4.6 billion loan book within three years.