Liberty prices $1 billion RMBS issue

Liberty Financial Pty Ltd (Liberty) has priced a $1 billion Liberty Series 2023-1 RMBS issue, its seventy-fourth term securitisation. The Liberty Series 2023-1 Trust is Liberty’s forty-eighth issue of securities backed by a portfolio of residential mortgages.

Given strong investor demand across all offered tranches, the transaction was upsized from a launch volume of A$600 million to A$1 billion. Deutsche Bank AG is the sole Arranger and Joint Lead Manager along with BofA Securities, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corporation. The transaction comprises A$ 1 billion of notes rated by Moody’s Investors Service (Moody’s) and Fitch Ratings (AAA notes only).

• The A$250 million Class A1a notes to be rated Aaa(sf)/AAAsf with a weighted average life of about 0.3 years, priced at a margin of 115 basis points over one-month BBSW.

• The A$500 million Class A1b notes to be rated Aaa(sf)/AAAsf with a weighted average life of about 2.5 years, priced at a margin of 165 basis points over one-month BBSW.

• The A$159 million Class A2 notes to be rated Aaa(sf)/AAAsf with a weighted average life of about 3.5 years, priced at a margin of 240 basis points over one-month BBSW.

The pricing of the Class B, C, D, E and F notes to be rated Aa2(sf), A2(sf), Baa2(sf), Ba2(sf) and B2(sf) is not disclosed.

Preethi Visweswara, Director at Deutsche Bank, said: "We are very pleased with the level of institutional investor participation across the capital structure which demonstrates strong support for Liberty, and the collateral offered. Investors continue to have strong interest in assets classes outside of traditional residential mortgages as evidenced by the success of this transaction.”

Peter Riedel, Chief Financial Officer at Liberty, said: “Liberty is a leader in providing households and small businesses with the freedom to choose from a wide range of products and services to meet their financial needs. We are grateful for the support investors have extended to our business.”

Liberty has a rating of “STRONG” from Standard & Poor’s for the servicing of prime and non-prime mortgages as well as for servicing auto loans and commercial mortgages. Liberty is also Australia’s only investment-grade rated non-bank issuer (BBB-, outlook positive by S&P) and one of only a few lenders with an unblemished capital markets record with no ratings downgrades or charge-offs ever experienced by its securitisation program.