Pepper Australia will pay 120 basis points over the one-month bank bill swap rate on the top tranche of its latest issue of non-conforming residential mortgage-backed securities.Pepper's A$350 million non-conforming issue, PRS10, which was priced on Friday, follows Liberty Financial's $500 million issue of RMBS backed by a pool of prime and non-prime mortgages earlier in the week.Pricing on the $245 million A1 tranche of the Pepper deal, which has a weighted average life of 2.3 years, is 120 bps over the swap rate. When Pepper did a non-conforming issue in May last year it paid 185 bps over the swap rate for a tranche with a weighted average life of 2.2 years.Pricing on the $38.8 million A2 tranche, which has a weighted average life of 2.3 years, is 165 bps over the swap rate. Pricing on the $18.2 million B tranche, which has a weighted average life of 3.8 years, is 240 bps over the swap rate.Pricing on the C, D, E, F and G tranches was not disclosed.Pepper's group treasurer, Todd Lawler, said in a statement that there were 14 domestic investors in the issue.PRS10 is a pure non-conforming RMBS, with no related rating dependency on mortgage insurers.