This article is from the Australian Property Journal archive
COMMERCIAL and residential property loan specialist Thinktank has closed its ninth commercial mortgage-backed securitisation (CMBS) issue for $500 million.
The transaction marks Thinktank’s thirteenth securitisation, taking the total of bonds issued to $6.0 billion. With this transaction assigned final ratings from Standard and Poors (S&P).
“The participation of 23 institutional investors (including 2 new investors), split between domestic (57%) and offshore accounts (43%) for this A$500 million deal, illustrates continuing strong support for the company’s dual mortgage-backed wholesale funding programs amid challenging conditions for Australian issuers,” said Jonathan Street, CEO at Thinktank.
Pricing for the transaction was disclosed across the structure down to the F Notes with the Class A1 Notes being set at a margin of +1.55% above the 30-Day Bank Bill Swap Rate and the Class A2 Notes at +2.35% over the 30- Day Bank Bill Swap Rate, with both tightening by 0.10% inside initial price guidance at launch on the back of strong investor interest.
With real money investors representing 59% of the total amount issued, with the remainder represented by bank balance sheets.
The transaction was 2.1x over-subscribed representing bids amounting to just over $1.0 billion, with the pool of 776 first mortgage loans with an average size of $644,324 while 85.1% of properties were in major metropolitan areas with 14.9% in highly urbanised non-metro locations.
“While the continuing impacts of higher interest rates are being progressively felt throughout the economy and the demand for credit has certainly begun to soften,” added Street.
“Our outlook for credit performance remains cautiously positive at this time and we are keen to maintain our long term support of SME and self-employed borrowers seeking mortgage finance solutions.”
Full Doc and SMSF loans accounted for 63% of the pool while alternate verification comprised 36.6%.
Additionally, industrial security represented the largest property type at 39.8% while retail, strata office and professional suites combined made up a total of 38.9%, with standard residential properties at 20.1%.
New South Wales was the most prominent borrower state at 41.2%, followed by Victoria at 33.6% and Queensland at 13.1%.
Self-managed superannuation fund (SMSF) borrowers accounted for 30.2%, with the weighted average Loan to Valuation Ratio (LVR) at 65.2% and 49.8% of loans extended to investors and the balance to owner-occupiers.
Most loans were on principal and interest repayment at 65.6% with 34.4% commencing under an interest only period before converting to principal and interest.
