Australasia's leading specialist finance provider, Liberty Financial, has priced Australia's first ever asset-backed securitization backed by prime and non-conforming auto loans. The deal is a four-tranche A$100 million offer via lead manager Macquarie Bank.
The Class A tranche is rated triple-A and carries an expected average life of one-and-a-half years. It was initially marketed at 25-35bp over 30-day BBSW.
The Class B tranche (rated BBB+) carries an expected life of 3.3 years and was marketed at 60bp-70bp over 30-day BBSW. The Class C tranche (rated BB) carries an expected life of 3.3 years and was marketed at 200bp-300bp over 30 day-BBSW. The Class D unrated tranche was privately placed.
The Class A tranche priced at 25bp over, while pricing of the remaining tranches was undisclosed as per Australian regulations.
The order book took in over A$200 million and was sold to 10 domestic investors including fund managers, institutional investors and insurers.
The deal is backed by 6,032 fixed-rate loans worth A$95 million, which fully amortize during the tem of the notes. 33% of the auto-loans are prime, while the remaining 66% are classified as non-conforming.
In terms of credit support, the Class B, Class C and Class D notes provide 22.1% credit support for the Class A notes. The Class C and Class D notes provide 8.4% credit support for the Class B notes, and the Class D notes provide 3.2% credit support for the Class C notes.
The notes will be issued via special purpose vehicle Liberty Series 2005-1 Auto Trust constituted under the Liberty Series Master Trust Deed. The Trust will purchase, via equitable assignment, A$95.145 million in auto-loans originated by Liberty Financial, funded through the issuance of the aggregate A$100 million notes.
Liberty provides innovative and fair solutions to borrowers that do not meet traditional lending criteria or do not wish to use mortgage insurers
