Liberty Financial Pty priced A$250 million ($240 million) of notes backed by small business loans in Australia’s first securitized bond deal since 2011 involving commercial mortgages.
The Melbourne-based company priced the main class of notes, which have a weighted average life of 1 1/2 years and carry a preliminary rating of AAA from Standard & Poor’s, at 150 basis points more than the bank bill swap rate, according to an e-mailed statement from the borrower.
“We haven’t really seen many deals of this type in Australia,’ said Alisha Treacy, a credit analyst at S&P in Melbourne. The last similar deal that S&P rated was another sale by Liberty in July 2011, she said.
Liberty joined Bendigo & Adelaide Bank Ltd. (BEN), Credit Union Australia Ltd. and Firstmac Ltd. in seeking funding in the Australian securitized bond market this month, with the other borrowers offering notes backed by residential home loans. There have been no sales of unsecured bonds in Australia for more than a week, data compiled by Bloomberg show.
The transaction, which was managed by Westpac Banking Corp. (WBC) and Credit Suisse Group AG, is Liberty’s third publicly-rated securitization based on loans to smaller businesses that are backed by commercial and residential mortgages. The asset pool includes 20.7 percent commercial property loans and 66.9 percent residential mortgages, S&P said in a report.
‘‘The transaction was well supported by investors across the entire capital structure,” Liberty said in its statement.
IMB Ltd. was the last issuer of asset-backed securities involving business properties in Australia, Bloomberg-compiled data shows. It sold small-to-medium enterprise bonds backed by a combination of residential and commercial mortgages in August 2011, according to the data.
Bendigo & Adelaide said yesterday it is planning to issue as much as A$500 million of notes backed by residential mortgages. The main class of notes is being offered at 90 to 95 basis points more than BBSW, according to a person familiar with the matter.
Credit Union Australia this week priced A$675 million of residential mortgage backed securities, with the top-rated notes yielding a 100 basis-point spread. Firstmac priced A$500 million of RMBS on June 7, including a class of notes in British pounds.
Liberty also raised A$700 million this year from two sales of non-conforming mortgage bonds, according to data compiled by Bloomberg.
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