Australian Finance Group prices $500 million RMBS issue

Australian Finance Group Ltd (ASX:AFG) has successfully priced its $500 million AFG 2019-1 Trust Residential Mortgage Backed Securities (RMBS) issue after receiving strong oversubscription.

On the back of the strong demand across the transaction, AFG upsized the deal from $350 million to $500 million. The 2019-1 issue represents AFG’s largest RMBS transaction since its first deal in 2013, and the first time the deal has been upsized.

AFG Chief Executive Officer David Bailey said “We are delighted in this outcome. Increasingly, investors are recognising that AFG’s value proposition as an issuer in the Australian RMBS market is unique and this has fortified support, driving oversubscription from a broadened investor base.

“As both an originator and a distributor of mortgages, AFG holds an enviable position in the Australian home loan marketplace that affords us a high level of insight into mortgage behaviours and trends. This expertise helps frame our credit policies and lending practices, underpinning our diversified earnings business model. Our AFG business continues to expand, with growth driven by considered product improvements and a measured approach to AFG’s expanding product range.

“The historical performance of our loan book is in the upper echelons of all issuers. At a time when some may argue, incorrectly in my opinion, that broker originated loans are poorer performing, it is opportune to point out that here is an exceptionally performing loan book which is 100 per cent originated by brokers.

“On behalf of AFG, I would like to express my thanks to our ongoing investors for their continued support and welcome our new investors. We appreciate the strong show of support and confidence in our business strategy. It is also important to acknowledge our brokers, who have demonstrated confidence in our products by recommending them to our clients.”

Details relating to the $500m AFG 2019-1 Trust RMBS transaction are below.

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