Bluestone has marked the transition of its business from non-prime mortgage lending to predominantly prime lending with the completion of its first issue of residential mortgage-backed securities under its prime program.

Bluestone Prime 2021-1 Trust is a A$700 million deal, with the A1 notes ($612.5 million with a weighted average life of 2.7 years) priced at a margin of 75 basis points over the one-month bank bill swap rate.

The $45.5 million of A2 notes, which have a weighted average life of 4.6 years, were priced at 105 bps over one-month BBSW.

The $12.6 million of B notes (WAL 4.6 years) were priced at a margin of 135 bps and the $10.1 million of C notes (WAL 4.6 years) were priced at a margin of 170 bps.

Bluestone managing director, treasury and funding, Todd Lawler said the company has been originating prime mortgages since 2019 and today they make up 80 per cent of total origination volume.

In another development, Bluestone has started purchasing prime mortgages from Athena Home Loans in a deal that will allow it to purchase around $2.5 billion of loans over the next three years. The first tranche of $320 million was acquired in May.

Bluestone Prime 2020-1 Trust has $400 million of loans originated by Bluestone and $300 million originated by Athena.

Lawler said 26 investors bid on the deal and 60 per cent of bids were from overseas.

Bluestone manages around $11 billion of mortgages originated in Australia and New Zealand.