Heritage Bank has finalised pricing for a $400 million residential mortgage-backed securities (RMBS) transaction, the bank’s 11th public securitisation issue and its first since 2011.
The $400 million issue of floating rate bonds was split into three tranches, comprising $ 368 million Class A Notes (BBSW + 95 basis points); $20 million Class AB Notes (BBSW + 165 basis points); $12 million Class B Notes (pricing not disclosed).
The transaction was arranged by ANZ in conjunction with Joint Lead Managers Westpac and NAB.
The issue was well supported by investors, with the senior tranche (A Notes) approximately two times oversubscribed and the mezzanine tranche (AB notes) three times oversubscribed.
Heritage Bank CEO Mr John Minz said the final pricing represented the lowest blended margin paid by an Australian mutual ADI for an issue of this type in the past few years.
“The success of the transaction is an excellent outcome for Heritage as it reinforces our ability to access a diversity of cost effective funding channels,” he said.
“We received an overwhelmingly positive response from investors, with the final pricing achieved representing a great outcome for Heritage and our growth ambitions.
“We've been a consistent issuer into this market over a long period of time, and have a solid track record across a diversity of funding channels.
“We will continue to examine opportunities to strengthen our funding base to help us provide the best deal to our customers."
The transaction was rated by Standard & Poor's and Fitch Ratings Agency.