Investors snap up Suncorp's first RMBS since 2013

Yesterday Suncorp Bank priced its APOLLO Series 2015-1 Trust residential mortgage-backed securitisation, which was upsized from A$750 million at launch on 23 February to $1.25 billion at its close.

This is Suncorp's first RMBS deal since May 2013. The bank said that 33 investors from Singapore, Tokyo, London and domestic markets participated in the transaction.

Five classes of notes were offered to the market and were priced as follows:
Class A Notes: $1.150 million, priced at 90 basis points of the bank bill swap rate; Class AB Notes: $62.5 million (BBSW +175); Class B1 Notes: $30 million (BBSW +230); Class B2 Notes: $4.875m (BBSW +310); Class B3 Notes: $2.625m (BBSW +500).

The deal is backed by 100 per cent fully documented, mortgage insured, first ranking prime mortgage loans underwritten by Suncorp that have either been originated by Suncorp's own branch network (approximately 40 per cent) or via third-party brokers. At launch, the pool was split between owner-occupied loans (78 per cent) and investment loans (22 per cent).

The pool has 100 per cent LMI cover with QBE Lenders Mortgage Insurance the sole provider, according to pre-sale reports from S&P and Moody's, cited by Ken Hanton, NAB credit analyst in a note to clients.

Hanton also noted that where this year's Suncorp RMBS differs from the 2013 model is that 2015-1 has a B3 note in the capital structure and the transaction also includes a mechanism that switches off liquidity to the B1, B2 and B3 notes should any liquidity triggers applicable to the B notes be met.

Macquarie Bank, ANZ, Deutsche Bank and Westpac were joint lead managers.