The local mortgage-backed securities market showed no obvious signs of pressure during March, as AMP Bank, Thinktank, Firstmac, LaTrobe and Liberty all got deals away.
But investor Realm Investment House cautioned that widening secondary market spreads, particularly in offshore market, meant that investors in structured finance were reconsidering where the best relative value was to be found.
In the latest transaction, AMP Bank priced its Progress 2023-1 Trust issue, upsizing the deal from A$500 million at launch to $750 million.
AMP said there were 17 investors in the transaction, with about a third of them real money investors.
Pricing on the A notes, worth $690 million and with a weighted average life of three years, was 145 basis points over the one-month bank bill swap rate.
The AB notes, worth $30.2 million and with a life of 5.3 years, were priced at a margin of 240 bps. The B notes, worth $11.4 million and with a life of 5.3 years, were priced at a margin of 310 bps.
Pricing of the C, D, E and F notes was in a range from 350 bps to 695 bps.
Commercial and residential property lender Thinktank priced its fourth RMBS issue (and twelfth securitisation overall), upsizing the deal from $500 million to $750 million.
Thinktank chief executive Jonathan Street said 20 investors participated in the transaction, with 42 per cent of them from overseas and real money investors taking half the issue.
Pricing on the A1 notes, worth $600 million and with a weighted average life of 2.2 years, was 165 bs over one-month BBSW.
The A2 notes, worth $87.7 million and with a life of 2.2 years, were priced at a margin of 240 bps. The B notes, worth $20.2 million and with a life of 3.6 years, were priced at a margin of 320 bps.
Pricing on the C, D, E and F notes ranged from 360 bps to 725 bps.
Theo Calligeris, a portfolio manager at Real Investment House said the Australian RMBS market is in a strong position, with credit quality holding up well. But market conditions are changing.
Speaking at an Australian Securitisation Forum RMBS briefing this week, Calligeris said it was a “widening spread market” again, with the initial impact in the secondary market and better relative value in overseas market.