Pepper Homeloans, an Oakwood Group company, has completed a A$400m securitization of non-conforming domestic residential mortgage backed securities.
Pepper Residential Securities Trust No.5, which comprised six tranches, represents Peppers fifth non-conforming securitization and its largest to date.
The transaction was well supported by Australian, European and Asian investors with more than a dozen participating in the transaction, resulting in it being substantially oversubscribed.
Initially priced at A$350m, strong investor demand lead to the deal being upsized to A$400m. The assets will be serviced by Peppers wholly owned subsidiary, Pepper Australia Pty Ltd.
Mike Culhane, chief executive of Oakwood, says: Pepper has now completed five securitisations and has securitized in excess of A$1.3bn since its first deal in 2003. In line with our expectations, the Australian mortgage market is maturing today in the same way that the UK market developed some 10 years ago.”
“Pepper is an established, successful business and is well poised to capitalise on the continuing growth in its domestic market, as well as benefiting from the increasing demand from overseas investors.
Richard Klemmer, chairman of Pepper and president of Oakwood, adds: It is encouraging to see existing investors participating in this transaction, as well as attracting a number of first time investors to the non-conforming mortgage sector. Despite being our largest to date, the transaction was still oversubscribed by a large margin a clear indication of investor confidence in Pepper.