In a trading update this week, Yellow Brick Road announced that it had entered into a new exclusive negotiation arrangement with a major Australian bank for it to provide a $300 million residential mortgage-backed securities warehouse facility to the YBR group.
“The exclusive negotiation period will allow YBR and the warehouse lender to complete all necessary due diligence, seek to obtain all necessary credit and other approvals required and finalise definitive legally binding transaction documentation,” YBR said in a statement.
“The obtaining of the RMBS warehouse facility for YBR and commencing a securitisation programme is subject to YBR being able to enter into definitive legally binding transaction documentation with the warehouse lender and all other relevant third parties and satisfying any related conditions that will be included in the transaction documentation.”
Last year, the ASX-listed wealth management company appointed long-serving Macquarie director Frank Ganis to its board. In an interview with Investor Daily’s sister title Mortgage Business back in November, Mr Bouris was quick to praise Mr Ganis’ experience with securitisation and wholesale funding.
“We are always exploring different funding lines,” Mr Bouris said. “Frank was one of the original architects of PUMA, so those are some of the things we’ll be calling on him to have a look at.”
YBR is also eager to capitalise on opportunities in the commercial lending sector. Mr Bouris noted that the increased availability of business credit, spurred by strong competition among alternative lenders, is driving growth for the group’s aggregation business, Vow Financial.
Yellow Brick Road grew its underlying loan book to $44.1 billion in FY17, up by 17 per cent from the previous year, and completed settlements at a combined worth of $15.3 billion.
