La Trobe Financial has raised A$1.25 billion in the residential mortgage-backed securities market, with only indirect involvement from the Australian Office of Financial Management, giving notice that the asset-backed securities market is open for business.
La Trobe will pay 120 basis points over the bank bill swap rate on $281 million of A1S notes, which have a weighted average life of 0.7 years.
It will pay 195 bps over BBSW on $593 million of A1L notes, which have a weighted average life of 3.2 years
And it will pay 275 bps over BBSW on $235 million of A2 notes, which have a weighted average life of 3,2 years.
La Trobe said 88 per cent of the issue was placed with real-money investors, including European, Asian, American and local institutions. There were three new investors.
The AOFM supported the deal by investing in two prior transactions. The use of the Structured Financial Support Fund to invest in prior deals allows investors to sell into the secondary market and re-invest in the primary issuance.
La Trobe’s chief treasurer Martin Barry said in a statement: “This transaction confirms the strength of our platform and the quality of our underlying assets as safe harbour assets in a difficult global investment environment.”
La Trobe’s deal follows a successful RMBS issue by Liberty Financial last week, which raised $500 million and included a Japanese yen tranche. The AOFM bought $64.5 million of notes on a margin of 120 bps.
Also yesterday, lender RedZed announced that it had received in-principle approval for an investment of up to $17.5 million from the SFSF. The funding will be invested directly into RedZed’s warehouse facility.
The company said it was the first time it has been involved in a transaction with the AOFM.