The $118 million senior tranche of the issue was rated AAA by Moody’s. The issue was backed by a high-quality pool of unsecured personal loans as collateral and was split into eight classes.
Short-term debt from the SocietyOne $230 million warehouse facility (arranged by NAB in late 2019) will be shifted to long-term debt as a result of the transaction.
Strong and diverse consumer demand and capital markets confidence led the tranche to be 2.4 times oversubscribed and cleared at an issue margin of 75 basis points.
Notable investors included an offshore asset manager, three local managers and two local large bank balance sheets. One hundred per cent of the mezzanine tranches were successfully pre-sold to a local large fund manager.
“We are extremely pleased with the outcome of the transaction, especially in such a challenging economic environment,” said John Cummins, chief investment officer of SocietyOne.
“The margins achieved are truly first rate, and the fact that we were 2.4 times oversubscribed is a very strong reflection of the quality of the SocietyOne loan collateral and resulting support from investors.”
The business has said that the deal’s performance demonstrates SocietyOne’s mature digital finance business alongside the quality of its origination and servicing operations.
“This is a natural progression for SocietyOne and reflects the quality of our credit and the maturation of our business mode,” said Mark Jones, chief executive of SocietyOne.
“It is a strong indicator that our brand and products are ready for the broader global and institutional capital markets.”
The transaction is expected to catalyse a regular program of capital markets issuance in the ABS market by SocietyOne, lowering funding costs, raising profitability and enabling more competitive borrowing rates for its customers.
“The addition of an asset-backed securities trust provides valuable funding diversity and opens us up to significant growth opportunities,” stated Mr Jones.
“It will continue to fuel originations growth, which is on track to surpass $1.5 billion in the coming months.
“What will always remain consistent is our commitment to providing our customers with a better deal and simple, fast, high quality experience.”
The digital finance platform was awarded number 2 in The Australian Financial Review’s Top 100 Most Innovative Companies 2020.
