Liberty prices $800 million RMBS issue

Liberty Financial today priced its A$800 million Liberty Series 2017-1 RMBS issue, its thirty-eighth public term securitisation in Australia. Given strong investor demand, the transaction was upsized from a launch volume of A$500 million to A$800 million. Westpac Banking Corporation (Westpac) is the sole Arranger and Joint Lead Manager along with Deutsche Bank and National Australia Bank.

The transaction comprises A$800 million of notes rated by Moody’s Investors Service (“Moody’s”). The transaction attracted strong interest from investors across all offered tranches.

  • The A$184.0 million Class A1a notes to be rated Aaa(sf), with a weighted average life of about 0.4 years, priced at a margin of 75 basis points over one month BBSW.
  • The A$336.0 million Class A1b notes to be rated Aaa(sf), with a weighted average life of about 2.5 years, priced at a margin of 140 basis points over one month BBSW.
  • The A$172.0 million Class A2 notes to be rated Aaa(sf), with a weighted average life of about 3.5 years, priced at a margin of 225 basis points over one month BBSW.

The pricing of the Class B, C, D, E and F notes to be rated Aa2(sf), A2(sf), Baa2(sf), Ba2(sf) and B1(sf), respectively, is not disclosed.

Peter Taplin, Director of Debt structured Finance at Westpac, said: “Liberty Financial has again confirmed its status as a major issuer of non-prime mortgage backed securities in the Australian market. We are extremely pleased with the level of investor participation across the capital structure and their interest in opportunities to buy collateral originated by Liberty Financial.”

The assets underlying the transaction consist of a mixed pool of prime and non-prime mortgages with a weighted average loan-to-value ratio of approximately 72.5%. In addition, the collateral is well seasoned at around 12 months. The Liberty Series 2017-1 transaction will settle on 27 March 2017.

“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,” added 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, negative outlook 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 originated securities or programs.

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