Diversified lender Liberty Financial has finalised a A$1.1 billion securitisation of notes, backed by a portfolio of its prime mortgages.  The Liberty PRIME Series 2022-1 RMBS issue is the lender's seventieth term securitisation, and Liberty's tenth prime residential mortgage transaction. 

The $968 million Class A1 notes, rated Aaa(sf)/AAAsf by Moody’s Investors Service and Fitch Ratings, respectively, will pay 95 basis points over the one-month bank bill swap rate. No other pricing was disclosed. 

Nevertheless, this data – although limited to a single tranche – suggests the non-bank lender's cost of funds is already heading upwards, with the margin for the Class A1 notes 25 basis points wider than for Liberty's previous comparable issue, one that was completed about six months ago.

In that transaction, Liberty paid 70 bps over BBSW for $880 million of Class A1 notes in its $1 billion Liberty PRIME Series 2021-2 RMBS deal, which settled on 26 August last year.

In a Moody's pre-sale report, the collateral consists of a pool of prime residential mortgages with a weighted average loan-to-value ratio of 66 per cent. Of these loans, 7 per cent had LTVs above 80 per cent and 3.4 per cent of the loans had a scheduled LTV above 90 per cent.

The loan pool has no borrowers with prior credit impairment (ie, default, judgment or bankruptcy). Around 24.6 per cent of the home loans were granted to self-employed borrowers.

Westpac Banking Corporation was the sole arranger and a joint lead manager, along with BofA Securities (a marketing name used by the global markets division of Bank of America), Commonwealth Bank of Australia, Deutsche Bank AG Sydney Branch, National Australia Bank and SMBC Nikko Capital Markets.