Liberty Financial (Liberty) today priced the Liberty Series 2018-1 SME transaction, its seventh issue of securities backed by a portfolio of its innovative small-to-medium enterprises (SME) loans. This is Liberty’s forty-fourth public term securitisation.
Westpac Banking Corporation (Westpac) is the Arranger and Joint Lead Manager with Credit Suisse for the transaction. The transaction comprises A$450 million of notes rated by Moody’s Investors Service (Moody’s). The transaction attracted strong interest from investors across all offered tranches.
The Class A1 tranche is a super-senior tranche which benefits from over two times the subordination required to achieve a Aaa-rating from Moody’s.
The A$270.0 million Class A1 notes to be rated Aaa(sf) with a weighted average life of about 2.0 years, priced at a margin of 145 basis points over one month BBSW.
The A$90.0 million Class A2 notes to be rated Aaa(sf) with a weighted average life of about 3.6 years, priced at a margin of 195 basis points over one month BBSW.
The pricing of the Class B, C, D, E and F notes to be rated Aa1(sf), Aa3(sf), A3(sf), Baa3(sf) and B1(sf) is not disclosed.
"We are extremely pleased with the level of institutional investor participation across the capital structure and their overall volume of support . A strong endorsement of Liberty, and the collateral offered. Investors continue to have strong interest in asset classes outside of traditional residential mortgages as evidenced by the success of this transaction" said James Kanaris, Director at Westpac.
Will Farrant, Managing Director at Credit Suisse, said: “The success of this transaction confirms Liberty is a leading and trusted benchmark issuer of SME securities in the Australian market. Investors continue to show healthy interest in opportunities to buy high quality collateral originated by exceptional issuers.”
The issue consists of a pool of SME mortgages with a weighted average loan-to-value ratio of 62% and is seasoned at over 4 months.
The Liberty Series 2018-1 SME transaction will settle on 16 August 2018.
“Liberty is a leader in providing households and small businesses with the freedom to choose from a wide range of products and services to meet their financial needs. We are grateful for the support investors have extended to our business,” said Peter Riedel, Chief Financial Officer at Liberty.
Liberty has a rating of “STRONG” from Standard & Poor’s for the servicing of prime and non-prime mortgages as well as for servicing auto loans and commercial mortgages. Liberty is also Australia’s only investment grade rated non-bank issuer (BBB-, outlook stable by S&P) and one of only a few lenders with an unblemished capital markets record with no ratings downgrades or charge-offs ever experienced by its securitisation program.