Book growth drives strategy at Resimac
Andrew Marsden, general manager, treasury and securitisation at Resimac in Sydney, discusses the firm’s growth ambitions, the consequences of becoming a listed company, and its engagement with securitisation sectors outside Australia – including in the emerging New Zealand market.
How has Resimac’s merger with Homeloans, which took place late in 2016, affected the business? Has there been a significant impact on origination and funding volume?
The Homeloans merger was a distribution play for the core mortgage business. It was undertaken to broaden access to the various distribution channels in the Australian market. We have been successful in expanding our footprint in the market, and we now probably have one of the wider reaches across prime and nonconforming products of all the nonbanks.
In which area are you currently seeing most potential for growth, and why?
Nonconforming is intrinsically a countercyclical market, particularly with high-yielding, high-risk products. We have been able to carve out a defined niche of the broader specialist-lending market in Australia, particularly in the near-prime space.
Did the transparency requirements of being a nonbank prepare Resimac well for becoming a listed company?
We have always been a public company, which offers a degree of transparency of itself, but listing increases public access to information. The internal governance hasn’t been a big stretch from the way the company had been run previously.
Resimac has priced prime and nonconforming US dollar securitisation tranches in 2018. How does demand differ?
The key point is the way in which Australian nonconforming residential mortgage-backed securities (RMBS) are structured. They offer a lot of credit and cashflow protection and support to investors, and there is a strong relative-value argument particularly for the senior tranches. This is what US investors that participated in our recent Bastille nonconforming trade recognised. The majority were existing investors in our Premier programme.
It is also worth noting that Liberty Financial has similar resonance with European investors. It is a combination of marketing and being consistent, but it is also a reflection of the strength of Australian nonconforming structures.
Resimac has also previously issued RMBS in New Zealand. What is the strategy in this jurisdiction?
We participated in the working groups for the Reserve Bank of New Zealand (RBNZ)’s proposed “simple, transparent and comparable” changes. We understand the RBNZ’s objectives but we are cautious on the possible unintended consequences of standardising structural parts of the debt markets, particularly given the risk it could bifurcate the issuance market.
We are very supportive of the standardisation data templates and we do think there are positive initiatives currently under way.
nonbank Yearbook 2023
KangaNews's eighth annual guide to the business and funding trends in Australia's nonbank financial-institution sector.