Australian transport-to-health care company Mayne Nickless has securitized A$92 million ($60 million) of rental cash flows from one of its hospital real estate assets, the Joondalup campus hospital in Western Australia.

The deal, which was arranged by Westpac Capital Markets, is the first by the company and one of the very few hospital securitizations in the market. Health Care Trust No. 1, a sub trust under a master structure intended exclusively for Mayne Nickless-related issues, sold fixed-rate amortising bonds with an 18.5-year maturity at 135 basis points over the equivalent swap rate. The transaction took advantage of increasing demand for annuity-style products with maturities of 15 years or more, which have become popular since changes last year to the way the Department of Social Security administers its means test. Analysts estimate the market for such investment products could be worth A$2 billion a year.

Mayne Nickless is believed to have earmarked another four or five assets for similar treatment, with a value of more than A$100 million. - Roger Hogan

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