Pepper Residential Securities Program

Pepper has a well-established Term securitisation program developed over the past 12 years, supported by Australian and international institutional investors. Term securitisations are used to refinance drawings under warehouse facilities.

Treasury and funding expertise 

We have a number of long term funding partners and are a trusted repeat issuer in the term securitisation markets.

Proprietary residential securities program
Pepper has completed 19 RMBS transactions since 2001 for a total value of A$7.4 billion, demonstrating its financial strength and resilience as one of Australia’s leading issuers of non-conforming RMBS and Prime RMBS.

The performance of the proprietary Pepper Residential Securities program is unparalleled both in terms of ongoing loan arrears performance and cumulative realised portfolio losses.

In March 2016, Pepper completed the largest non-conforming RMBS deal in its history - the landmark Pepper Residential Securities Trust No.16 (“PRS16”). The strategic use of a US Dollar Tranche demonstrates our ability to regularly access global capital and is testament to Pepper’s expertise in originating and servicing high quality residential mortgage assets. This was the largest non-conforming RMBS transaction in Australia since 2006.

The A$700 million issue was well supported by a total of 22 blue-chip accounts, with 76% of investors from offshore.

The emergence of the non-conforming RMBS market in Australia presents an interesting diversification play for traditional prime RMBS investors both here and overseas, and a higher-yielding investment alternative.

With concerns regarding the exposure of prime Aussie RMBS deals to the credit standing of mortgage insurers, the non-conforming issues present an alternative by which to diversify such risk away. The Australian non-conforming RMBS market is helping to facilitate the development of a deeper sub-investment grade debt market, by continuing to provide deal structures with greater variation in bond classes, including lower-rated securities. This gives investors access to an alternative, higher-yielding investment class.