Pepper exercises call option on Pepper Residential Securities Trust No.8 ("PRS8") transaction

Posted 10-01-2014

Pepper Australia Pty Limited (“Pepper”) has today announced that it has exercised its call option (“the call”) on the Pepper Residential Securities Trust No.8 (“PRS8”). The call was exercised and refinancing completed on 10 January 2014. The total loan portfolio held within PRS8 at the call date was approximately $108.5 million. This is the eighth call option exercised by Pepper.

The exercise of the call enabled PRS8 to fully repay the following notes initially purchased by investors on 23 December 2010:

Class of Notes Current Standard  & Poor's Rating Note Balance at Issue Date $'000 Note Balance at Call Date $'000
Class A1 Notes AAA 26,000 -
Class A2 Notes AAA 78,000 -
Class A3 Notes AAA 97,500 46,882
Class B Notes Non-Rated 24,700 24,700
Class C Notes Non-Rated 11,700 11,700
Class D Notes Non-Rated 9,100 9,100
Class E Notes Non-Rated 6,500 6,500
Class F Notes Non-Rated 6,500 6,500
Class L Notes Non-Rated 3,500 -

Pepper’s ability to complete the PRS8 call once again demonstrates it’s capacity and commitment to refinance high quality residential mortgage assets in accordance with investor expectations.

“Fixed income investors need comfort that RMBS issuers have the financial capacity, and indeed intention, to fund call options on all RMBS issues which they sponsor”, said Pepper’s Co-Group Chief Executive Officer, Patrick Tuttle. “Pepper’s capacity and desire to complete the call demonstrates our ongoing commitment to satisfying the intended refinancing obligations for all RMBS transactions in which we retain an underlying beneficial interest. This is the only tangible way in which we can give our programme investors genuine confidence in the expected weighted average lives of securities which we issue into the market”, said Tuttle.

“We genuinely believe that investors will view our calling of the PRS8 transaction in a favourable light, and that it will further enhance Pepper’s reputation as a programmatic issuer and servicer of high quality mortgage-backed securities”, added Tuttle.