Liberty Financial (Liberty) today priced the Liberty Series 2019-1 SME transaction, its eighth issue of securities backed by a portfolio of its innovative small-to-medium enterprises (SME) loans. This is Liberty’s forty-eighth public term securitisation bringing Liberty’s total SME securitisations to approximately A$3.0 billion.
Given this strong investor demand across all offered tranches, the transaction was upsized from a launch volume of A$400 million to A$550 million. Westpac Banking Corporation (WBC) is the sole Arranger. WBC is also a Joint Lead Manager along with Credit Suisse and Merrill Lynch International. The transaction comprises A$550 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$357.5 million Class A1 notes to be rated Aaa(sf) with a weighted average life of about 2.4 years, priced at a margin of 135 basis points over one month BBSW.
The A$99.0 million Class A2 notes to be rated Aaa(sf) with a weighted average life of about 3.6 years, priced at a margin of 175 basis points over one month BBSW.
The pricing of the Class B, C, D, E and F notes to be rated Aa1(sf), Aa2(sf), A2(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 which is a strong endorsement of Liberty and the collateral offered. Investors continue to have strong interest in assets classes outside of traditional residential mortgages as evidenced by the success of this transaction" said James Kanaris, Director at Westpac.
The issue consists of a pool of SME mortgages with a weighted average loan-to-value ratio of 60% and is seasoned at over 16 months. The Liberty Series 2019-1 SME transaction will settle on 10 October 2019.
“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.