Firstmac prices Australia’s first solar RMBS issuance

Non-bank lender Firstmac has announced that it has priced a $1.2 billion residential mortgage-backed security (RMBS) issue that includes residential mortgages written under the rooftop solar proxy.

The rooftop solar proxy is an accreditation that a residential property receives when it has solar installations that are sufficiently sized given the features of the residential buildings they are installed on.

The accreditation is provided by the Climate Bond Initiative, an international organisation that aims to “mobilise global capital for climate action”.

Firstmac’s RMBS issue consisted of $306 million in Green Bonds backed by Australian residential mortgages on homes with solar panels installed.

The lender said that it completed a “rigorous certification process” with Climate Bond Initiative prior to the issuance of the solar residential mortgage bonds.

Firstmac stated that its climate bonds aim to “strengthen” Australia’s response to the threats of climate change by motivating home buyers to adopt sustainable and environmentally friendly housing and encourage borrowers to improve the energy efficiency of their homes.

James Austin, Firstmac’s chief financial officer, said that the RMBS issue was the latest in a series of initiatives to “develop a funding pipeline for green loan products in Australia”.

He said: “We are very proud to have once again led the way in developing products that help to reduce Australia’s carbon emissions, after previously issuing Green bonds for energy-efficient homes and also pioneering the reporting of greenhouse gas emissions from each vehicle in our auto bond issues.”

Firstmac also offers a Solar Home Loan that supports home owners with increased electricity bills by installing a solar energy system. The lender said that the installation comes “at effectively no cost”.

The home loan offers an interest rate discount of 0.6 per cent for five years to borrowers who install a solar power system on their home that is “large enough to make a real impact” on the amount of power that the borrower takes from the grid.

The issuance follows a $2 billion RMBS issue in February this year, which was backed by a “larger-than-usual proportion” of investment mortgages.

The lender’s green issuance brings the total amount of RMBS and asset-backed securities (ABS) issued by Firstmac so far in 2024 to $3.7 billion, marking a record six-month issuance for Firstmac.

The announcement follows the news that Firstmac’s “cyber incident” resulted in a data leak that revealed customer information, including account balances and personal addresses.

[Related: Firstmac customer data allegedly leaked on darknet]