Pepper starts marketing PRS 26 RMBS deal

Thursday, 04 June 2020

On 4 June, Pepper Group began taking indications of interest for its residential mortgage-backed securities (RMBS) deal, PRS 26. The capped A$700 million (US$482.4 million) deal is expected to launch in the week beginning 8 June. Commonwealth Bank of Australia is arranger, and joint lead manager alongside Macquarie Bank, National Australia Bank, Standard Chartered and Westpac Institutional Bank.

PRS 26 structure and initial price guidance

Tranche	Indicative volume (A$m)	Expected rating (S/M)	Weighted-average life (no. of years)	Initial credit enhancement (per cent)	Initial price guidance (bp/1m BBSW)
A1-s	160	AAA/Aaa	0.6	30	105 area
A1-a	330	AAA/Aaa	3.1	30	180-185 area
A2	108.5	AAA/Aaa	3.1	14.5	240 area
B	38.5	AA/NR	4.1	9	310 area
C	21	A/NR	4.1	6	410 area
D	15.4	BBB/NR	4.1	3.8	535 area
E	9.1	BB/NR	3.9	2.5	ND
F	6.4	B/NR	2.8	1.6	ND
G1	5.5	NR/NR	ND	N/A	ND
G2	5.6	NR/NR	ND	N/A	ND

Source: Commonwealth Bank of Australia 4 June 2020