Non-bank lender Firstmac completes $300 million auto ABS issue

Leading non-bank lender Firstmac has successfully completed a $300 million Auto ABS issue, pricing at the tightest margin across every tranche for all ABS transactions in Australia this year.

The issue is the second Auto ABS transaction for Firstmac, which completed its inaugural trade this time last year.

Chief Financial Officer James Austin said the successful transaction was a testament to the quality of the auto loans that Firstmac has written since it stepped up its push into auto lending in recent years.

“We had 23 institutional investors participate in the transaction which is particularly high and demonstrates confidence in the high-credit-quality loans that we originate,” Mr Austin said.

“This caps off a great year for Firstmac, particularly in the second half where we have been writing record volumes in both home and auto.”

The issue price for Tranche A1 was just +137 over the Bank Bill Swap Rate (BBSW).

Continuing its groundbreaking practice on its first auto ABS issue, Firstmac detailed the amount of Co2 emissions from each car the ABS is secured against, prepare the ground for Firstmac to issue a “Green” auto bond in the future that is secured only against electric vehicles, targeting eco-focused institutional investors.

The issue secures Firstmac’s funding for auto lending well into 2024.

It follows Firstmac’s $500 million Residential Mortgage-Backed Securities (RMBS) issue last month backed by SMSF loans, and a $1.2 billion RMBS issue in August.

The latest RMBS issue brings the total amount of RMBS and ABS issued by Firstmac since 2003, to more than $43 billion.