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By: Staff Reporter
Pepper has acquired the $109 million loan portfolio of Bank of America-Merrill Lynch’s First Permanent.
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The acquisition includes $69 million of loans within a warehouse trust and residual income and capital units, with the option to buy a further $40 million in mortgages in July.
According to the company’s managing director and chief executive officer Patrick Tuttle, the transaction represents a significant milestone for Pepper.
“We have undertaken extensive due diligence on the First Permanent loan book over recent months which confirms it to be one of the best underwritten loan books in the country. First Permanent has applied stringent credit criteria and property valuation processes to these loans, ensuring they were only made to borrowers with stable debt servicing capabilities,” Mr Tuttle said.
First Permanent’s typical target market were first time home buyers who had not yet had time to save a deposit but who could demonstrate evidence of a reliable income stream (at least for 2 or 3 years), had sound credit histories, and had potential for high future income growth.
All mortgages in the portfolio are first ranking registered mortgages over real property positioned in good locations within metropolitan and approved regional areas.
Mr Tuttle said the company’s expertise as a specialist lender put Pepper in a good position to assess and value whole loan opportunities of the kind presented by the transaction.
“Pepper will continue to explore opportunities to acquire loan and other asset portfolios which complement our credit, third-party servicing and debt capital markets skills.”
