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The non-bank lender has priced an ABS bond issue worth over $180 million, backed by unsecured personal loans.
SocietyOne has launched and priced its first $182 million asset-backed securities (ABS) bond issue, which was backed by a pool of unsecured personal loans as collateral and split into eight classes.
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The $118 million senior tranche was 2.4 times oversubscribed and cleared at an issue margin of 75 bps and was rated AAA by credit ratings agency Moody’s.
According to the lender, demand for the AAA tranche was diverse, with investors including an offshore asset manager, three local asset managers, and two local large bank balance sheets.
The mezzanine tranches were pre-sold to a local fund manager.
The transaction will involve the transfer of short-term debt from the SocietyOne $230 million warehouse facility (arranged by NAB in late 2019) to long-term debt.
SocietyOne has indicated that this transaction is expected to be the first of a regular program of capital markets issuance in the ABS market by the lender, and would reduce funding costs, improve profitability, and enable more competitive borrowing rates for customers.
Commenting on the bond issue, SocietyOne chief executive Mark Jones said that the deal has demonstrated the “maturation” of the lender’s digital finance business.
He said: “This is a natural progression for SocietyOne and reflects the quality of our credit and the maturation of our business model.
“It is a strong indicator that our brand and products are ready for the broader global and institutional capital markets.
“The addition of an asset-backed securities trust provides valuable funding diversity and opens us up to significant growth opportunities. It will continue to fuel originations growth, which is on track to surpass $1.5 billion in the coming months.”
Chief investment officer John Cummins said that he was pleased with the outcome of the transaction, particularly in a challenging economic environment.
“The margins achieved are truly first rate, and the fact that we were 2.4 times oversubscribed is a very strong reflection of the quality of the SocietyOne loan collateral and resulting support from investor,” he said.
SocietyOne has provided over $1 billion in total lending, with the broker channel driving more than $70 million in loan originations since its launch 16 months ago.
[Related: Prospa prices 1st ABS]
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