Liberty Financial (Liberty) today priced its A$500 million Liberty Series 2020-1 RMBS issue, its fifty-seventh term securitisation in Australia. Notably the deal includes a ¥26.3 billion tranche to accommodate the strong demand for Australian collateral from Japanese investors. The transaction also represents the second successful transaction since the AOFM commenced its program to purchase RMBS in response to the pandemic. AOFM participation was A$64.5 million in the Class A2 notes.
Sumitomo Mitsui Banking Corporation (SMBC) is the sole Arranger. SMBC Nikko Capital Markets Limited (SMBC Nikko) is Joint Lead Manager (JPY Notes only) along with Commonwealth Bank of Australia (CBA) (AUD Notes only). The transaction comprises A$500 million of notes rated by Moody’s Investors Service (Moody’s).
The ¥26.3 billion Class A1 notes to be rated Aaa(sf), with a weighted average life of about 2.4 years, priced at a margin of 50 basis points over three month JPY LIBOR.
The A$64.5 million Class A2 notes to be rated Aaa(sf), with a weighted average life of about 2.4 years, priced at a margin of 120 basis points over one month BBSW.
The Class B, C, D, E F and G notes are expected to be rated Aa2(sf), A2(sf), Baa2(sf), Ba1(sf) B1(sf) and NR, respectively, with pricing undisclosed.
Luke Spitty, Executive Director at SMBC Nikko, said: “The success of this transaction confirms Liberty is a leading and trusted benchmark issuer of RMBS securities in the Japanese market. Investors continue to show healthy interest in opportunities to buy high quality collateral originated by exceptional issuers.”
"We are extremely pleased to see investor participation and interest in the subordinated notes, which is certainly a positive development for the market and a strong endorsement of Liberty," Ernest Biasi, Executive Director Securitisation CBA, said.
“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. Our disciplined practices and prudent capital management is reflected in our portfolio performance and conservative issuance structure. We are grateful for the support that the AOFM and investors have extended to our business,” Peter Riedel, Chief Financial Officer, Liberty Financial, said.
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.