It says part of the funding will go towards supporting its interactions with advisers
Non-bank mortgage lender Basecorp Finance has announced it has secured $250 million in additional funding through the securitisation of originated home loans.
The RMBS transaction is backed by prime and non-conforming New Zealand residential mortgages, and it is Basecorp’s inaugural capital markets transaction, with Westpac New Zealand acting as arranger and lead manager.
Chief financial officer John Moody said the transaction “reflects positively” on Basecorp’s approach to originations, and also on the credit quality of the mortgage applications it has received from advisers to date.
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“We’ve been working on this transaction for six to nine months, but we’ve had a securitisation facility with one of the major banks since 2014,” Moody told NZ Adviser.
“The idea is very much to fill up the warehouse with mortgage loans, and then originate to the capital markets. So, we see this as a really successful validation of our strategy.”
“Our growth has been really strong over the past 2-3 years, and there have been a number of drivers for that,” he explained.
“The Royal Commission in Australia changed bank lending standards, and that’s caused a bit of a drift towards the non-bank industry in general. We’ve definitely been one of the beneficiaries of that, as have all the non-banks.”
Moody noted that part of the $250 million note issue will go towards supporting Basecorp’s interactions with advisers, a channel which he says is ‘crucial’ to its business strategy.
“The adviser channel is absolutely crucial for us, and we do about 95% of our originations through that channel,” Moody said.
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“From our perspective, the advisers are very much our customers, and we’re not looking to advertise direct to consumers.
“We’ve built a number of panel relationships with New Zealand market aggregators over the past few years, and we see this funding as very much an opportunity to both lower rates and also service a wide variety of brokers within those aggregator networks.”
Basecorp Finance is one of the few 100% New Zealand owned non-banks in the market, and has also reduced its long-term mortgage rates as a result of the transaction. New longer-term rates will now start at 5.49% per annum.
