Firstmac completes $1.75bn RMBS issue

Non-bank lender Firstmac has reinforced its status as Australia’s top issuer of residential mortgage-backed securities (RMBS) in Japan, successfully launching a $1.75 billion issue that was nearly twice subscribed.

Chief financial officer James Austin said that this prime RMBS issue, which followed a series of smaller issues by other lenders in recent weeks, highlighted the strong demand from investors for Firstmac’s high-quality RMBS.

“This was our first roadshow to the UK and Japan since Covid-19, and we enjoyed very good engagement with investors,” Austin said.

“There was much interest as to why Firstmac arrears are much lower than the Australian banks and, ultimately, the issue closed at the tightest price in several years.”

This marks the fourth transaction for Firstmac in 2024, bringing the total funds raised this year to $5.5 billion.

The issue was priced at a margin of just 1.08 per cent over the Bank Bill Swap Rate (BBSW), significantly lower than the public benchmark prime transaction in March 2024, which priced at +1.20 per cent.

More than 30 institutions from Australia, the UK, and Japan participated in the issue, which was backed by a mix of owner-occupied and investment property loans.

Austin said that the issue would enable Firstmac to maintain a competitive edge in prime lending within the third-party channel.

“This issue will allow us to maintain a strong presence in the residential lending market, offering a real alternative to the big banks,” he said.

Lead managers for the issue included ANZ, the Commonwealth Bank of Australia (CBA), DBS, NAB, Natixis, and UOB, with NAB arranging the transaction.

With this latest RMBS issue, Firstmac has now raised almost $47 billion in RMBS since 2003.

Based in Brisbane, Firstmac Limited is an independently owned Australian financial services provider with over 45 years of experience in home and investment loans.

Most recently, Firstmac priced Australia’s first RMBS issuance that included 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 Bonds 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.

[RELATED: Firstmac prices Australia’s first solar RMBS issuance]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.