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Standard & Poor’s has provided its highest credit rating to $658.5 million of La Trobe Financial’s sixth residential mortgage-backed securities (RMBS) issue.
La Trobe Financial’s class A1S, A1L and A2 securities, valued at a collective $658.5 million, were given a triple A credit rating by the ratings agency. This is matched by Moody’s Investors Service’s triple A ratings for the first three classes.
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The non-bank lender also has $30 million in outstanding class B securities, which was given a double A rating by S&P, along with $23.25 million of class C debt, which received an A rating.
The remaining classes D, E and F, collectively valued at $33 million, received ratings of triple B, double B and single B, respectively.
La Trobe Financial, which is 80 per cent owned by asset management firm Blackstone, said earlier this month that the $750 million pricing for its sixth RMBS was a “record” for the lender, which has issued $2.2 billion of RMBS to domestic and international institutional investors since 2014.
The non-bank lender’s head of debt capital markets, Ryan Harkness, said at the time that with loan originations surpassing $7 billion per year, the RMBS transaction was a “practical step to complement current institutional mandates and [La Trobe Financial’s] nationally and internationally awarded $2.1 billion retail credit fund”.
La Trobe Financial revealed in February that its retail credit fund has tripled its funds under management over the last three years to more than $2 billion, with its group FUM tipping at $5 billion. CIO Chris Andrews attributed much of the retail credit fund’s FUM growth to a rise in SMSF investors.
Rival non-bank lender Pepper also recently announced pricing its first RMBS at $1 billion, after attracting strong oversubscription exceeding $2 billion. Pepper has issued more than $11.6 billion of RMBS across 26 non-conforming and prime RMBS issues to date.
In March, another non-bank lender, Firstmac, priced its $600 million RMBS issue at 1.05 per cent over the bank bill swap rate. The lender’s previous RMBS issues were $600 million in November 2017, $1 billion in September 2017 and $1.7 billion in March 2017.
[Related: RMBS delinquencies to rise in 2018]
