Specialist commercial and residential property lender Thinktank has successfully closed its seventh commercial mortgage-backed securitisation (CMBS) issue for $750 million – its largest issue to date and the largest ever SME CMBS transaction recorded in Australia.
Coupled with its first $500 million residential mortgage-backed securitisation (RMBS) issue in August, it takes the total of bonds issued to $3.2 billion, confirming the company’s reputation as a prominent capital markets issuer and lender to Australian self-employed and SME borrowers.
“The participation of 20 institutional investors, both in Australia (90 per cent) and overseas (10 per cent) for this $750 million deal, illustrates a continuation of keen demand for alternate asset-backed issues,” Thinktank chief executive Jonathan Street said.
The transaction was assigned final ratings from Standard and Poor’s. The $450 million Class A1 Notes and the $124.5 million Class A2 Notes are rated AAA(sf).
The $48.75 million Class B Notes, the $48.75 million Class C Notes, the $33.75 million Class D Notes, the $18 million Class E Notes, and the $12.75 million Class F Notes have assigned ratings of AA(sf), A(sf), BBB(sf), BB(sf) and B(sf), respectively.
Pricing was fully disclosed across the structure, with the Class A1 Notes being set at a margin of 1.05 per cent above the 30-Day Bank Bill Swap Rate.
Self-managed superannuation fund (SMSF) borrowers accounted for 31 per cent of loans, while the weighted average Loan to Valuation Ratio (LVR) was 63.8 per cent. Just under 50 per cent of loans were to investors, with the balance to owner-occupiers.
Real money investors represented 70 per cent of the total amount issued, while banks accounted for 30 per cent. The transaction was 1.4x over-subscribed representing bids exceeding $1,050 million.
The pool of 1,262 first mortgage loans with an average size of $594,294 comprised 42 per cent industrial properties, 15 per cent retail, 14 per cent office, 9 per cent other commercial and 20 per cent residential. Of the properties, 80.5 per cent were located in metro areas, while 19.5 per cent in non-metro areas.
NSW was the most prominent state with 52 per cent, followed by Victoria with 25 per cent and Queensland at 13 per cent.
Most loans were on principal and interest repayment at 64 per cent, with only 36 per cent in an interest-only period.
“Nearly two years into COVID, the fact we have been able to successfully complete both CMBS and RMBS issues for $1,250 million in the past few months speaks volumes for how the business has successfully negotiated the pandemic and has continued to provide credit to the critical SME and self-employed sectors of the economy on a competitive and scalable basis,” Mr Street added.
