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In a sign that investor confidence is starting to filter back into the wholesale markets, FirstMac has upsized its Residential Mortgage Backed Securities (RMBS) issue after greater than anticipated investor bids.
The transaction was initially launched at $400 million but was increased to $470 million on the back of strong investor demand.
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Just over $215 million of the issue was backed by the Australian Office of Financial Management (AOFM), while the remaining $254.86 million was bought by external investors.
FirstMac’s chief financial officer James Austin said the company was looking forward to passing the benefits of the government backed issue on to its home buyers and investors.
“This is the third allocation of AOFM funds for investment in FirstMac issued RMBS, and enables FirstMac to provide Australians a competitive and quality alternative to the traditional banks in the residential mortgage sector,” Mr Austin said.
FirstMac is currently in discussions with the Australian Prudential Regulation Authority about gaining an authorised deposit taking institution license so as to diversify its funding base in order to compete with the majors.
