The two non-bank lenders have priced new mortgage bond issues as UK pension funds continue to liquidate their holdings to raise cash.
Non-bank lenders Firstmac and Pepper have raised $2.5 billion through the sale of mortgage backed securities on Thursday, defying the pressure created on local securitisation markets by a wave of UK pension fund selling.
“It’s a solid transaction size and that taken together with the BWICs demonstrated that the market is still operating” Firstmac’s chief financial officer, James Austin, told“The UK investors are selling because it’s still a liquid market here in Australia,” he said.While the primary market is open for business, non-bank lenders are being forced to pay more for financing as global bond and credit markets have been hit hard in a turbulent year.
Meanwhile, New Zealand’s second largest non-bank lender, Avanti, launched a $NZ250 million mortgage-backed bond sale, adding to the market supply. But analysts said that since the notes amortise as borrowers pay down the underlying loans, the actual values were closer to $500 million and $250 million.
Before this week’s $2.5 billion of transactions, a total of $28.2 billion had been raised through the sale of residential mortgage-backed bonds this year.
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