Liberty prices $750 million non-prime RMBS issue

Liberty Financial (Liberty) today priced its A$750 million Liberty Series 2018-3 RMBS issue, its forty-fifth public term securitisation in Australia. Notably the deal also includes €60.3 million Euro tranche to accommodate the strong demand for Australian collateral from European investors.

Given this strong investor demand across all offered tranches, the transaction was upsized from a launch volume of A$500 million to A$750 million. National Australia Bank (NAB) is the sole Arranger and Joint Lead Manager along with Bank of America Merrill Lynch (Euro Notes only), Commonwealth Bank of Australia, Deutsche Bank and Westpac Banking Corporation

The Liberty Series 2018-3 transaction comprises A$750 million of notes rated by Moody’s Investors Service and Fitch Ratings (AAA notes only).

• The A$127.5 million Class A1a notes to be rated Aaa(sf)/AAAsf, with a weighted average life of about 0.3 years, priced at a margin of 75 basis points over one month BBSW.

• The A$262.0 million Class A1b notes to be rated Aaa(sf)/AAAsf, with a weighted average life of about 2.4 years, priced at a margin of 135 basis points over one month BBSW.

• The €60.3 million Class A1c notes to be rated Aaa(sf)/AAAsf, with a weighted average life of about 2.4 years, priced at a margin of 75 basis points over three month EURIBOR.

• The A$187.5 million Class A2 notes to be rated Aaa(sf)/AAAsf, with a weighted average life of about 3.5 years, priced at a margin of 190 basis points over one month BBSW.

The pricing of the Class B, C, D, E and F notes are expected to be rated Aa2(sf), A2(sf), Baa2(sf), Ba2(sf) and B2(sf), respectively, is not disclosed.

Craig Stevens, Director, Securitisation at NAB, said: “The Liberty Series 2018-3 transaction was well received by the market which demonstrates that investors continue to show healthy interest in opportunities to buy notes in high quality transactions backed by conservative collateral pools, originated by leading issuers like Liberty Financial.”

Peter Riedel, Chief Financial Officer at Liberty, 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. We are grateful for the support investors have extended to our business.”

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.