Blackstone-owned non-bank lender La Trobe Financial has priced a monster $1.25bn residential mortgage-backed securitisation (RMBS) issue with pricing among the lowest since before the global financial crisis.
La Trobe chief financial officer Martin Barry said the issuance “continues to expand our already-strong RMBS funding channel comprising of some 52 active holders of our paper and the issuance was 1.5x overbid”.
“The proceeds of the issue will be used by La Trobe Financial to continue writing home and business loans,” he said.
Blackstone is considering a stockmarket listing of La Trobe and is testing a dual track process.
About 65 per cent of the transaction was placed with institutional investors across the structure, while the remainder was placed with international investors.
The arranger of the deal was Macquarie Bank. Joint lead managers included Commonwealth Bank, Citi, HSBC, Macquarie, National Australia Bank and Natixis.
La Trobe Financial will pay
83 basis points over the bank bill swap rate on $937m of A1 notes, which have a weighted average life of 2.5 years. Pricing on $177m of A2 notes, which also have a weighted average life of 2.5 years, was 105 basis points over BBSW.
Elsewhere in the non-bank lending space, KKR-backed Pepper Money priced its IPO at $2.89, with Goldman Sachs telling fund managers the $450m institutional book build is already oversubscribed.
According to a note sent to fundies late on Tuesday, the Pepper Money IPO already has enough institutional orders to fill its $450m book, with brokers set to launch the bookbuild on Wednesday, a day early.
The $2.89 offer price values Pepper at 10.5 times its forecast net profit for 2021.
The non-bank lender expects to have $15.13bn in loans on its books at December 31, and is expected to enter the market capitalised at about $1.3bn.
Pepper’s pre-deal reports suggest it expects to make about $356.3m net interest income in 2021, up only slightly from its 2020 result, with profit from operations at about $121m.
Fund mangers were told money raised through the float will help pay down a bridge lending facility, partially repay shareholder loans and strengthen Pepper’s balance sheet as the non-bank lender looks for growth opportunities in the sector.
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