Pepper prices $675m RMBS

Pepper Money has priced a $675 million residential mortgage-backed security (RMBS) transaction, PRS 37, designed to support Pepper Money’s non-conforming mortgage business growth.

The PRS 37 transaction is expected to settle on 30 May 2023.

It is the third non-conforming PRS deal (which aims to “optimise funding of its Australian mortgage originations”) for 2023 and its fourth public securitisation for the year.

Pepper Money’s chief executive Mario Rehayem commented: “We continue to see strong support for our securitisation issuance programs from new and existing long-term investors across both of our asset classes.

“In the first five months of calendar 2023 we have successfully completed four public securitisations — raising more than $2.3 billion in Residential Mortgage Backed Securities and $0.7 billion from our SPARKZ ABS Asset Finance program.

“We continue to see strong demand for our products reflecting the compelling value proposition they provide customers. Our PRS 37 transaction supports the ongoing opportunities available to us in the underserved non-conforming segments of the mortgage market, where we have built a strong track record over 20 years of sustainable growth across economic cycles.”

Pepper Money’s deputy treasurer Steven Fischer added: “Since 2003, Pepper Money has successfully completed 58 securitisation transactions (including PSR37) raising more than $36 billion.

“PRS 37 again demonstrates Pepper Money’s ability to call every term deal at the first opportunity and to provide an attractive investment proposition for investors.”

National Australia Bank Limited was lead arranger and lead manager, while King & Wood Mallesons acted as Pepper Money's legal counsel.

[Related: Pepper Money raises 1st $1bn RMBS for 2023]