Non-bank lender Firstmac has completed a $475 million issue of asset-backed securities for car loans. The auto bond issue details the amount of Co2 emissions from each car it is secured against, which is an Australian first.
The issue paves the way for Firstmac to issue a “Green” auto bond in the future that is secured only against electric or hybrid vehicles with low emissions, targeting eco-focused institutional investors.
CFO James Austin said the issue, which was the first auto ABS (Asset-Backed Security) issued by Firstmac, was consistent with the company’s policy of minimising the impact of its business operations on the environment.
“We are dedicated to playing our role in mitigating Climate Change and these emissions-transparent auto bonds will be a useful new tool in that battle,” Mr Austin said.
“We were very pleased with how the issue was received by investors, with strong support in the market enabling us to substantially upsize the issue and secure our funding for auto lending well into 2023.”
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Firstmac now has a broad suite of offerings for both eco-conscious investors and borrowers, with a Green Home Loan offering a discount of up to 1.58% for builders of energy-efficient homes, and a Green Car Discount, which offers a 0.7% discount for buyers of hybrid or electric vehicles.
Both loans are provided with the backing of the Federal Government’s Clean Energy Finance Corporation (CEFC).
The ABS transaction was upsized from $300 million to $475 million in response to strong investor demand, with pricing on the Class A at 1.75% over BBSW.
Westpac and National Australia Bank were joint lead managers, while Westpac was the arranger.
Brisbane-based Firstmac Limited is an independently-owned, Australian financial services provider with more than 40 years’ experience in home and investment loans.
It has written in excess of 130,000 home loans, has $16 billion in loans under management, and also manages $300 million in cash investments.
