Login
ISCOVER
Non-bank lenders Pepper Money and Firstmac have each undertaken capital raises to support their respective growth strategies, securing more than $2 billion between them.
Pepper Money Limited has priced a $1.03 billion vehicle and equipment asset-backed security (ABS) transaction, known as SPARKZ 9, which is set to settle on Wednesday (19 March).
The transaction is the lender’s first securitisation transaction for 2025 and forms part of Pepper Money’s broader ABS program, which was launched in 2019.
The funding will support the ongoing originations growth of Pepper Money’s asset finance business, which has grown significantly since its inception in 2014. It had 5.6 billion of assets under management at the end of 2024 in a portfolio that includes vehicle receivables as well as marine and recreational equipment.
Pepper Money CEO Mario Rehayem said: “Pepper Money undertook its first SPARKZ transaction in 2019 – and we are now onto our ninth transaction.
“Including SPARKZ 9, we have raised more than A$6.4 billion from this program alone – a testament to the ongoing investor support for Pepper Money.”
Pepper Money treasurer Anthony Moir said: “Since 2003, Pepper Money has successfully completed, in total, 65 prime, non-conforming, and ABS securitisation transactions (including SPARKZ 9), raising more than A$42.3 billion.
“The strong ongoing support from debt capital market investors for our issuances demonstrates the strength and longevity of Pepper Money’s relationships and our ability to continue to fund Pepper Money’s ongoing growth.”
Pepper Money’s securitisation was arranged by BofA Securities and jointly managed by the Commonwealth Bank of Australia, National Australia Bank, Royal Bank of Canada, Societe Generale, Standard Chartered Bank, and Westpac Banking Corporation.
Firstmac completes $1bn RMBS
Meanwhile, non-bank lender Firstmac has completed a $1 billion residential mortgage-backed securities (RMBS) issue backed by self-managed super fund (SMSF) residential and lenders risk fee (LRF) residential loans.
The issuance, which was upsized from an initial target of $500 million, attracted significant investor interest from institutions in Australia, New Zealand, south-east Asia, the United Kingdom, and the United States.
Firstmac said the issue was over-subscribed and priced at +108 basis points above the one-month bank bill swap rate (BBSW).
Firstmac’s chief financial officer, James Austin, said the RMBS issue would fund Firstmac’s continued expansion in the residential SMSF property lending market, which he said had been “abandoned by the big banks”.
“Our residential SMSF product has been very popular with investors, and it’s not surprising. We’re bringing competitive SMSF options and rates to a sector that is largely being ignored,” he said.
Commenting on the issuance, Austin said: “This is the largest Eagle trade that we have completed to date and demonstrates growing acceptance within the institutional investor market for our SMSF collateral.”
“Pricing was also very good, being at the tight end of historical ranges.”
Austin noted that investor confidence in the RMBS market remains strong, particularly following the recent Reserve Bank of Australia (RBA) rate cut, the first since November 2020.
Westpac Banking Corporation was the lead arranger for Firstmac’s RMBS issuance, with joint lead managers including National Australia Bank, Sumitomo Mitsui Banking Corporation (SMBC), United Overseas Bank (UOB), and Westpac.
[Related: MA Money prints $500m RMBS]
JOIN THE DISCUSSION