Australian Finance Group prices $500 million RMBS issue

Australian Finance Group Ltd (ASX:AFG) has successfully priced its $500 million AFG 2019-2 Trust Residential Mortgage Backed Securities (RMBS) issue after once again receiving strong oversubscription. This is the second RMBS issue this year for AFG.

AFG Chief Executive Officer David Bailey welcomed the issue. “Building on the success of the 2019-1 issue earlier this year, we are very pleased to see an increase in domestic and international investor participation. The 2019-2 issue represents the first transaction with a deal roadshow to UK investors and the strong demand across domestic and international investors has allowed the deal to upsize from $350 million to $500 million.

“There is a growing understanding of the unique position AFG holds in the RMBS market and the flow on effect that has on our overall portfolio performance.

“As both an originator and a distributor of mortgages, our experience frames our credit policies and lending practices. Our portfolio, 100% broker introduced, has a track record of outstanding performance.

“On behalf of AFG, I would like to express my thanks to our investors for their strong show of support that has enabled the company to issue $1 billion of paper into the market this year. It is also important to acknowledge our brokers, who have demonstrated confidence in our products and service by recommending them to our clients.”

Details relating to the $500M AFG 2019-2 Trust RMBS transaction are below:

Class Issue Size A$(m) Expected Ratings S&P / Fitch Initial Credit Support Interest Rate Expected WAL
A $450.00 AAAsf/AAAsf 10.00% BBSW + 115 bps 2.7yrs
AB $29.25 AAAsf/NR 4.15% BBSW + 175 bps 4.5yrs
B $8.00 AAsf/NR 2.55% BBSW + 205 bps 4.5yrs
C $6.25 Asf/NR 1.30% BBSW + 250 bps 4.5yrs
D $3.15 BBBsf/NR 0.67% BBSW + 375 bps 4.5yrs
E $1.70 BBsf/NR 0.30% BBSW + 575 bps 4.5yrs
F $1.65 NR/NR undisclosed 5.0yrs