Pepper raised $350 million through the offering and said the market in this asset class, which had taken a strong battering following its association with sub-prime debt during the global financial crisis (GFC), was showing signs of picking up.
"The (PRS10) issue was extremely well supported by a total of 14 domestic investors, many of whom are repeat buyers ... [there was] significant reduction in issue margins across all tranches since the $300 million PRS9 issue in May 2012," said the Group's treasurer, Todd Lawler.
Although a majority of Pepper's loans were triple A or triple A-, there were also healthy subscriptions in the lower, riskier tranches, Rob Verlander, head of debt markets securitisation at the Commonwealth Bank of Australia, who helped with the issue, said.
"This transaction conclusively demonstrates that there is significant demand from institutional investors for quality non-conforming RMBS across the rating spectrum," he said.
NAB, who also co-ordinated the sale to investors, reiterated the revitalisation they see in the market.
"We are particularly happy with the pricing and composition of the final book. The transaction was oversubscribed and bids were scaled", said Sarah Samson, director of securitisation at NAB.
The PRS10 $350 million batch is the tenth public offering out of a total of $3 billion RMBS issued by the firm.
