Brighten Home Loans finally issued another non-resident prime RMBS offering. The company leveraged $371m on Solaris 2022-1. Brighten Home Loans is actually a non-bank lender found in 2017. The institution is under the Real Asset Management Group. It is an Australian financial services organization that has license operations in both Australia and Hong Kong.
The lead managers for securitization are Credit Suisse, Goldman Sachs, and Standard Chartered. These financial institutions had included an indicative of a minimum size of A$314.5m. The upsize total comprises the A$115m of Class A-S and A$155m of Class A-L noted. This price is with 0.5 and 2.1-year-weighted average lives. The price is at one month BBSW plus 170bp and 105bp.
The A$63.3m of Class B, A$70m of Class C, A$53.3m of Class D, A$40m of Class E, A$13.5m of Class F1, and A$13.5m for Class F2 notes have three-year WALs. The class A credit support for the Class A to F1 notes are 48.43%, 36,34%, 22,97%, 12,78%, 5.41%, and 2,59% respectively. Brighten Home Loans serves the non-resident clients of Australia or residents with foreign income.
Therefore, the non-resident borrowers of Australia could make up around 91.3% of the Solaris 2022-1 portfolio. This covers the approximately 84.7% residents of China. Compared to regular RMBS mortgage pools in Australia, they have less than 1% foreign ownership. So mortgage pools from overseas borrowers are actually in the risker position for lenders.
Moreover, the economic and political situations of the two countries endanger repayment prospects. This is majorly due to the higher credit risks. Thus, S&P allows substantial credit enhancements to assign preliminary AAA ratings especially for senior non-resident in RMBS tranches. This is far higher than the support levels of 8% and 30% for both prime and non-conforming Class A notes.