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The lending arm of the ASX-listed aggregator has priced a $750 million residential mortgage-backed securities transaction to bolster its alternative lending offering.
Aggregation group Australian Finance Group (AFG) has announced that its wholly owned subsidiary AFG Securities Pty Ltd has priced its first prime residential mortgage-backed securities (RMBS) transaction of 2024.
The AFG 2024-1 transaction – expected to settle next Thursday (27 June) – was upsized from its original $500 million pool to $750 million. The final order book was in excess of $1 billion, according to the aggregation group.
The money will be used to bolster the lending activities of AFG Securities, which is distributed under the AFG Home Loans white label offering.
According to AFG, the Class A1 to Class C notes were all publicly offered, with interest reportedly received from more than 15 investors.
Class D to F notes were placed to an existing investor, with AFG retaining the junior Class G note.
Speaking of the transaction, AFG CEO David Bailey said: “AFG 2024-1 received competitive pricing with good coverage across all of the notes which allowed the transaction to upsize to $750 million.
“Once again, we are very pleased to see the support of AFG Securities and the opportunity to provide a competitive alternative lending alternative for our brokers and their customers.”
The most recent transaction means that AFG Securities has issued more than $9 billion since 2013.
The group has been a strong proponent of the RMBS market, with AFG chair Greg Medcraft having recently outlined that he believes a public RMBS system should be created in Australia to provide a level playing field for mortgage lenders when it comes to funding, thereby introducing more competition in the home lending market.
[Related: AFG Securities prices $750m transaction]
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