Social bond issuance picks up momentum

John Kavanagh

Just weeks after Resimac included A$35 million of “social bonds” in an issue of residential mortgage-backed securities, Pepper Money has completed a $300 million RMBS issue made up entirely of social bonds.

Resimac said it would use the notes to provide loans to first home buyers in under-served communities.

Pepper said its social bond program “delivers positive outcomes by providing home loans to Australians who are purchasing a home to live in who would not typically qualify for a loan with a traditional bank. In the case of this transaction, the home buyers either have adverse credit history or are self-employed borrowers who are unable to provide the necessary financial information to qualify for a bank loan.”

Pepper priced the A1-s notes, worth $80 million and with a weighted average life of 0.6 years, at a margin of 100 basis points over the one-month bank bill swap rate.

The A1-a notes, with $145 million and with a weighted average life of 2.8 years, were priced at 160 bps over one-month BBSW.

The A2 notes, worth $43.2 million and with a weighted average life of four years, were priced at a margin of 215 bps.

The B through to F notes were priced in a range from 250 bps to 715 bps.

Pepper Money treasurer Anthony Moir said there is good demand for social bonds.