COUNTRY REPORT AUSTRALIAcapital relief issue off its Progress RMBS
programme.
In May, AMP Bank sold a A$1.3bn RMBS,
Progress 2017-1, using the same five leads.
Last September, the bank issued a A$750m
RMBS, Progress 2016-1.
› BLUESTONE PRICES NON-CONF RMBS
Specialist residential mortgage lender
BLUESTONE GROUP priced last Wednesday its
second non-conforming RMBS of the year
- a A$300m issue through Sapphire XVII
2017-2.
The A$150m Class A1s, the A$60m Class
A2s and the A$34.5m Class A3s, all with
2.1-year weighted-average lives and credit
support of 50%, 30% and 18.5%, priced in
line with guidance at one-month BBSW
plus 125bp, 170bp and 190bp, respectively.
The A$5.4m Class Es, the A$3m Class
Fs, the A$1.5m Class Gs and the A$7m X1
notes, priced at one-month BBSW plus
615bp, one-month BBSW plus 715bp,
one-month BBSW plus 1,100bp and 8.75%
versus low 600s, low 700s, 1,200bp–
1,300bp and 10.5%–11.5% guidance,
respectively.
The A$30m Class Bs, A$7.8m Class Cs and
A$6m Class Ds priced at one-month BBSW
plus 220bp, 315bp and 415bp, respectively,
while the A$1.8m Class Hs were retained.
The Ba to Fs all have 3.6 years WALs,
while the G, H and X1 notes have 2.3-year,
4.0-year and 0.9-year WALs, respectively.
The Bs to Gs have respective credit
support of 8.5%, 5.9%, 3.9%, 2.1%, 1.1% and
0.6%.
Moody’s sees all the A notes as Aaa and
the Bs to Fs as Aa2, A2, Baa2, Ba2 and B2,
respectively.
Macquarie was arranger on the issue and
joint lead manager with CBA.
On May 17 this year, Bluestone issued
non-conforming RMBS of A$250m through
Sapphire XVI 2017-1.› LATITUDE READIES LOANS ABS
Moody’s has assigned provisional ratings to
the A$500m LATITUDE AUSTRALIA PERSONAL LOANS
SERIES 2017-1 TRUST ABS, a securitisation of loans
that the country’s biggest consumer retail
finance firm had originated.
The A$331.5m Class As, A$56m Class
Bs, A$40m Class Cs, A$27m Class Ds and
A$45.5m Class Es are rated Aaa, Aa2, A2,
Baa2 and Ba2, respectively. The As to Es
have respective credit support of 38.79%,
28.57%, 21.1%, 16.22% and 7.83%. Citigroup,
Deutsche Bank and Westpac are expected to be
appointed joint lead managers.
In March this year, Latitude sold the
country’s first master-trust securitisation
with a A$1bn credit card ABS, Credit Card
Loan Note Trust Series 2017-1.
It returned in August with a second
securitisation of credit card receivables, a
A$500m trade through Credit Card Loan
Note Trust Series 2017-2.Beach Energy boosts M&A lending
Loans Borrower returns with year’s largest facility to back purchase of a unit of Origin EnergyAustralian oil and gas company BEACH ENERGY
is raising the country’s largest M&A loan of
the year, a A$1.575bn (US$1.2bn) facility to
back the purchase of a unit of Origin Energy,
in a boost to event-driven financing.
Joint underwriters, mandated lead
arrangers and bookrunners ANZ,
Commonwealth Bank of Australia and Credit
Suisse launched the deal into general
syndication last week.
Proceeds will finance Beach Energy’s
purchase of the Lattice Energy gas assets
from Origin Energy for A$1.585bn in cash.
The loan will also refinance existing debt.
The borrowing gives Australian and
Asian lenders a rare opportunity to provide
acquisition financing, which has been down
this year.
Including leveraged buyouts, Australian
M&A lending of US$10.2bn at the end of
October was 15% lower than US$12bn in the
same period of 2016.
Australian acquisition loans have largely
financed state privatisations this year and
most have had a limited syndication to small
clubs of relationship banks.
This includes multi-billion-dollar loans
totalling A$8.32bn for sponsors acquiring
power grid Endeavour Energy, and two deals
for land registration agencies Land and
Property Information and Land Titles Office.
Limited syndication was also in evidence
for a A$500m two-year loan backingengineering and infrastructure management
services group Downer EDI’s acquisition of a
majority stake in services provider Spotless
Group in September. The deal closed
with seven lenders, in addition to three
underwriters.
Corporate M&A loans have been scarce
this year. The only Australian corporate
acquisition loan to be widely syndicated in
2017 was a US$385m three-year facility for
satellite communications services provider
SpeedCast International.
That deal financed SpeedCast’s purchase
of Harris’s Caprock communications business
and closed in February with 12 lenders,
including two underwriters.
The borrowing offered top-level all-in
pricing of 433.33bp based on an interest
margin of 350bp over Libor.TIGHTER RETURNS
Beach Energy’s loan is offering tighter returns.
It is split into four bullet tranches: a A$500m
three-year term loan tranche A, a A$500m
five-year term loan tranche B, a A$500m five-
year revolving credit tranche C and a A$75m
three-year bank guarantee facility tranche D.
Only tranches A, B and C are being syndicated.
The interest margins are tied to a leverage
grid – the three-year tranche pays 170bp over
BBSY and the five-year tranches pay 200bp
over BBSY, based on opening leverage of just
over 1x debt-to-Ebitda.Lenders are being offered fees of 50bp to
90bp for commitments ranging from A$50m
to A$150m.
Bank presentations will take place this
week in Sydney, Singapore, Hong Kong and
Tokyo and commitments are due by early
December.
The financing has additional rarity value
as Beach Energy has not tapped the loan
market since December 2015, when it raised
a A$530m senior secured facility.
That financing was split into a A$200m
five-year revolving cash advance facility
tranche A, a A$200m three-year revolving
cash advance facility tranche B, a A$100m
three-year revolving tranche C and two
A$15m letters of credit.
The margin was based on a leverage
grid and opened at 150bp and 180bp over
BBSY for the three and five-year tranches,
respectively.
At that time, Beach Energy was in the middle
of a merger with Drillsearch Energy, another
Australian oil and gas company. The merger
created Australia’s largest onshore oil producer
and was funded by issuing new shares.
Beach Energy’s current acquisition of
Lattice Energy will more than double
its output. Last month Beach Energy
completed a A$301m rights issue that will
also help fund the acquisition of Lattice
Energy.
SHARON KLYNE