Australian equity release/reverse mortgage provider Household Capital has completed its first rated mortgage securitisation. HHC 2024-1 RMBS Trust is an AU$263m mortgage securitisation rated by Moody’s. The arranger and sole lead manager on the transaction was Citigroup Global Markets Australia.
“Our inaugural mortgage portfolio securitisation is a great outcome for Australian retirees and a big step forward in the evolution of Household Capital,” said Joshua Funder, Household Capital CEO.
“The quality of our customers and the low-risk nature of the mortgages we originate were critical in attracting local and global investors to sustainably scale retirement housing and funding and help Australians meet the challenge of an aging population,” added Funder.
The facility will refinance part of Household Capital’s existing mortgage portfolio and is based on a mortgage portfolio with an average loan-to-value ratio of less than 25%.
“The way Australian retirees access the wealth in their homes using a Household Loan is different from similar approaches elsewhere,” Funder said.
“The rating on our portfolio reflects a series of key differentiators of Australian equity release mortgages: higher voluntary discharge, shorter duration, lower negative equity risk and higher cashflows.
“We have achieved a strong Moody’s rating and innovated significantly to obtain a premium to par for the rated notes,” he added.
Household Capital is a specialist 60+ lender, originating mortgages which don’t require the borrower to have an income or make regular repayments and provides a range of home wealth access options distributed direct to customer as well as via partners, advisers and brokers. The company began mortgage origination in 2019 and has built a mortgage portfolio of over AU$420m.