The increased pricing becomes a nightmare for issuers in The Australian securitisation market. Severe geopolitical issues raise new deals’ price, even though it received support from cornerstone investors and issuers willing to pay more. Transaction timelines face continuous reassessment. As a result, broader markets’ prices change perennially, said director of securitisation at NAB, Lionel Koe.
Bankers’ actions have varied, they could pause or go on. Firstmac and Resimac for example, raised their transaction to A$1.2bn and Resimac A$1bn on RMBS print. On the other hand, AMP Bank paused transaction progress for 2022 for A$500m. Consumer lender Humm Group issued a no-grow A$250m ABS offering.
Humm Group was formerly Flexigroup. It is a payment service company with offerings in BNPL. It revolves around credit, small, and medium-sized enterprise. To clear the deal, Humm must pay for the coming 45bp wide for its previous trade. It costs more than the additional 26bp pick-up for Pepper Money’s latest prime RMBS.
The reason could be from the current Australian housing market trend in RMBS. Another reason might be from the rapid BNPL market. Humm ABS Trust is a subsidiary of Humm Group. It is a securitisation of a portfolio of Australian unsecured, retail, BNPL receivables originated by Humm BNPL, marked IFR Asia.
A fund manager who did not join the deal argued that there is no problem with Humm’s transaction structure, and also mentioned that Humm’s reputation is good in the BNPL market compared to other consumer lenders. CBA with NAB were the arranger of the transaction. It includes senior and subordinated green tranches, solar-related loans, making up 35.5% alone in the portfolio.
110bp over one-month BBSW is for the A$175m of Class A1 and A$6m of Class A1-G notes, complete with 1-year WALs and 27.6 credit support.
