Pepper prices non-conforming RMBS
Pepper Homeloans priced its A$300 million securitisation on Friday, marking the first non-conforming mortgage-back securities transaction in the Australian market since late last year. Pepper will pay 85 basis points over the 30-day bank bill swap rate on the $72 million A1 tranche of Pepper Residential Securities Trust No.9, which has a weighted average life of six months.It will pay 185 basis points over swap on the $138 million A2 tranche, which has a weighted average life of 2.2 years.It will pay 240 basis points over swap for the $38.4 million A3 tranche, which has a weighted average life of 3.3 years.The A1, A2 and A3 tranches were rated AAA by Standard & Poor's and Fitch Ratings.Pepper did not disclose pricing on the B to G tranches.Pepper said in a statement that these transactions were "largely as a result of reverse inquiries following our recent calls of PRS 6 and PRS 7, along with our increased origination volume over the past 12 months."Twenty per cent of the notes went to offshore investors.