Non-bank’s latest RMBS to ‘optimise’ funding

ASX-listed non-bank lender Pepper Money Limited (Pepper) has priced a $750 million residential mortgage-backed security (RMBS) transaction.

PRS 31 is its third non-conforming PRS deal for 2021, and its fifth public securisation this year.

When the transaction settles on 18 November 2021, it will bring Pepper’s total funding raised from public markets in 2021 to $4 billion.  

Overall, the non-bank has raised more than $27.3 billion across 46 RMBS and ABS transactions since 2003. 

Pepper’s PRS program comprises a mix of non-conforming and prime mortgages and is “designed to optimise the funding of its Australian mortgage originations”. 

Pepper chief executive Mario Rehayem commented: “We continue to see strong support from both new and long-term investors in our debt capital market issuances for both our prime and non-conforming. 

“This deal supports the ongoing growth opportunities available to us, in particular in the underserved segments of the mortgage market where we have a strong track record and compelling customer value propositions and continue to see strong demand for our products.” 

Pepper’s treasurer, Anthony Moir, added: “This was a positive result given competitive market conditions and is again a testament to Pepper’s well-established investor relationships and exemplary track record of calling every term deal at the first opportunity and providing an attractive investment proposition for investors.” 

Westpac Banking Corporation (Westpac) was the arranger of the transaction while Commonwealth Bank of Australia, National Australia Bank and Standard Chartered Bank were joint lead managers.

[Related: $850m RMBS priced by non-bank]