Australian mortgage lender Resimac’s first securitization of 2017 includes two tranches of U.S. dollar-denominated notes.
The AUS$500 million (US$380.1 million) deal, dubbed RESIMAC Triomphe Trust - RESIMAC Premier Series 2017-1, will issue a total of eight classes of notes backed by a pool of 1,269 loans prime mortgages. Included in the mix are fully amortizing loans, interest-only loans that convert to amortizing loans, and line-of-credit loans, according to rating agency reports.
The notes being issued include a $110 million fixed-rate tranche of U.S. dollar-denominated Class A1-a note and $50 million in Class A1-b interest-only notes. Both tranches are rated triple-A by Fitch Ratings and S&P Global Ratings. The remainder of the tranches, including the triple-AAA rated A2 tranche, are denominated in Australian dollars.
The trustee and custodian of the transaction is Perpetual Trustee.
All of the senior notes are supported by 10% credit enhancement. Similar to the previous Resimac securitization (2016-1) to feature U.S.-dollar notes, the transaction includes a scheduled amortization facility provided by National Australia Bank that will provide funds to pay off the notes prior to the scheduled amortization.
In its presale report, S&P notes that the portfolio’s credit weaknesses include a large percentage of loans with loan-to-value ratios above 75% (44.1%) and interest-only periods of up to 13 years (52.3%). In addition, 47.4% of the loans in the pool were used to cash out equity or refinance for debt consolidation.
Resimac is a non-bank wholesale lender based in Sydney, which grew out of a former state government housing program that serviced and securitized Australian residential loans.
