Australian non-bank lender Pepper Group has won strong support from investors in the US to raise $500 million in non-conforming residential mortgage-backed securities (RMBS).
The transaction is the largest non-conforming RMBS from Australia since the Global Financial Crisis and Pepper’s first public issue for 2014.
Joint lead managers were the Commonwealth Bank and NAB.
Pepper’s Co-Group CEO Patrick Tuttle says the inclusion of a USD tranche in the non-conforming program marks another significant milestone in the long history of non-conforming issuance by Pepper.
“The participation of US investors, along with a small number of European investors, in our non-conforming program helps to further diversify our offshore investor base, which is vital for a frequent RMBS issuer like Pepper,” he says.
$US200 million was issued with a margin of the one month Libor (London Interbank Offered Rate) plus 0.35%.
Sarah Samson, NAB’s Director of Debt Markets, says: “There was a healthy level of oversubscription across all of the AUD and USD tranches, and it is great for Pepper to be able to call on the US investor market to enable this larger transaction size and pricing”.
Here are the transaction details: