Pepper proceeding with new nonconforming RMBS offer

Friday, 16 March 2018

Following a round of investor meetings, Pepper confirmed on 15 March that it plans to issue a new nonconforming residential mortgage-backed securities (RMBS) deal. Price guidance has been disclosed on the top four Australian dollar denominated tranches (see table below).

The deal is expected to open in the week beginning 19 March. National Australia Bank is arranging and is joined by Commonwealth Bank of Australia and Westpac Institutional Bank. These three banks arranged Pepper’s investor meetings with Citi, which drops off the top line of the transaction.

Pepper Residential Securities Trust No.20 deal structure and price guidance

Note class	Indicative volume	WAL (years)	Rating (S&P/Moody's)	Indicative margin (bp/1m BBSW)
A1-S	A$136.5m	0.4	AAA/Aaa	65
A1-u1	US$136.5m	1	A-1+/P-1	ND
A1-a	A$210m	2.7	AAA/Aaa	120 area
A2	A$91m	2.7	AAA/Aaa	160-165 area
B	A$59.5	3.8	AA/NR	190-200 area
C	A$21m	3.8	A/NR	ND
D	A$14m	3.8	BBB/NR	ND
E	A$14m	3.8	BB/NR	ND
F	A$7m	2.6	B/NR	ND
G	A$7m	5	NR	ND

Source: National Australia Bank 15 March 2018