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Pepper and joint lead managers, Commonwealth Bank of Australia and National Australia Bank, have confirmed that the Pepper Residential Securities Trust No. 11 (PRS11) has been priced at $350 million.
The non-conforming RMBS transaction is Pepper’s second such RMBS, and third issue in total, for 2013.
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Pepper’s group treasurer, Todd Lawler, said the deal is a continuation of the long history of non-conforming issuance by Pepper dating back to 2003.
“Our track record and commitment to always call our term deals at the first available date continues to attract strong support from investors,” he said.
“The issue was extremely well supported by a total of 11 domestic and two offshore investors, many of whom are repeat buyers.
“We were particularly pleased with the extension of the tenor of the issue from a four-year to a five-year maturity,” said Mr Lawler.
Sarah Samson, director, securitisation at National Australia Bank, also said it was particularly pleasing that Pepper had been able to issue a five-year paper for this deal.
“The transaction was well bid, enabling the deal to be upsized on pricing,” she said.
Pepper’s group managing director and chief executive officer, Patrick Tuttle, said the transaction further demonstrates the strong support for the Pepper name in RMBS markets among both domestic and offshore investors.
“It also reflects the strength and resilience of our business in being able to fund ongoing volume growth through regular, programmatic issuance of both prime and non-conforming RMBS,” he said.
“We were also able to successfully launch and price the PRS11 transaction in the backdrop of the considerable market uncertainty surrounding the ongoing congressional debate in relation to the US debt ceiling limit”, added Mr Tuttle.
According to Rob Verlander, head of debt markets securitisation at CBA, “This result demonstrates that there is significant support from investors for quality, non-conforming RMBS across the rating spectrum,” he said.
PRS11 is the 13th public issue of residential mortgage-backed securities backed by Pepper-owned and serviced mortgages, increasing its total RMBS issuance to $4.4 billion.
