AFG mortgage backed securities issue success

Australian Finance Group (AFG) has priced its AFG 2016-17 Trust Residential Mortgage Backed Securities (RMBS) issue.

AFG chief operating officer David Bailey said the securitisation program is an important contributor to the company's overall growth strategy.

AFG is a diversified financial services company and one of the country’s largest mortgage broking groups. Through a network of 2,650 contracted mortgage brokers, AFG processes around $4.5 billion of finance every month and has a combined residential and commercial loan book of $120 billion.

"To execute a transaction under the terms achieved, in a market which has been relatively volatile in 2016 is very pleasing. The other positive aspect was that we were able to welcome some new investors to our programme," Bailey said.

"The success of today's issue reflects the confidence of domestic and offshore investors in the high-quality lending standards that AFG Securities apply.

"The performance of any mortgage starts and ends with the credit policies and appetite of the lender.

The transaction will settle on 4 November 2016.

"A vibrant and strong RMBS market is vital to ensure a greater level of competition and choice into the Australian mortgage market," he said.

The transaction was AFG’s first RMBS issuance since 2014. Its most recent prior issues were a $300 million issue in 2014 and $300 million in late 2013.

The AFG 2016-1 Trust Series was successfully arranged by National Australia Bank Limited (NAB). Joint lead managers were Australia and New Zealand Banking Group Limited and NAB.

Details relating to the $300 million AFG 2016-17 Trust RMBS transaction are as follows: