AFG prices first non-conforming RMBS

John Kavanagh

After raising A$700 million in the securitisation market in July – its biggest RMBS issue to date – Australian Finance Group has gone back to the market to raise another $500 million.

AFG subsidiary AFG Securities has successfully priced its inaugural issue of non-conforming residential mortgage-backed securities, AFG 2020-1NC Trust.

The transaction was upsized from $350 million at launch.

Pricing included a 90 basis point margin over the on-month bank bill swap rate for the $137 million A1-S notes, which have a weighted average life of 0.7 years.

The 90 bps margin was tighter than the 95 bps margin AFG paid on its A1-S notes in the July issue, which was backed by prime loans.

The $225.5 million of A1-L notes (with a weighted average life of 3.1 years) were priced at 155 bps over one-month BBSW.

The $92.7 million of A2 notes (with a weighted average life of 4.3 years) were priced at 180 bps over BBSW.

And the $20.2 million of B notes (with a weighted average life of 4.3 years) were priced at 265 bps over BBSW.