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Pepper I-Prime 2018-2: 15 October 2018

On the Closing Date, the Trustee will issue tranches of limited recourse, secured, amortising, floating rate, mortgage-backed debt securities backed by a mix of nonconforming and prime residential mortgage loans originated by Pepper Group Limited.

PGL established its first warehouse facility in March 2001 and completed its first term securitisation issue in April 2003. PGL has now completed 21 public term residential mortgage-backed securities issues of its residential non-conforming mortgage loans and 7 RMBS issues of Australian prime residential mortgage loans. The securities issued in these transactions have totalled A$13.23 billion. PGL has exercised the call options in respect of all 16 issues that have thus far reached their call date.

Eligibility criteria (includes): the Mortgage Loan is denominated and only payable in Australian dollars; the Debtor is a natural person or a corporation domiciled in Australia; the Mortgage Loan is a legal, valid and binding obligation of the Obligor, enforceable in accordance with its terms against the Obligor; there is no obligation to fund Redraws or Further Advances under the Mortgage Loan; the Obligor has no right to convert from a variable rate to a fixed rate in respect of the Mortgage Loan.

At the cut-off date (30 April 2018), the pool consisted of 1,117 full doc and 133 alternate doc variable rate residential loans. Occupancy type (by current balances): investment – 57.42%, owner-occupied – 42.58%. Loan purpose: purchase – 57.25%, refinancing – 41.61% and ex-construction – 1.14%. Repayment type: principal & interest – 52.89%, interest only – 47.11%. Regional concentration: NSW Metro – 36.98%, Vic Metro – 30.50% and QLD Metro – 9.92%.

EU Risk Retention: On the Closing Date and thereafter for so long as any Offered Notes remain outstanding, Pepper will, as an originator for the purposes of the risk retention rules under the CRR, retain a material net economic interest of not less than 5% in this securitisation transaction in accordance with the text of Article 405(1) of the CRR. As at the Closing Date, the Retention will be in the form of a pro-rata retention in each of the tranches sold or transferred to investors as provided in option (a) of paragraph 405(1) of the CRR, and will be comprised by Pepper holding 100% of the shares in the Retention Vehicles who will, between them, hold not less than 5% of the aggregate Invested Amount of each Class of Notes issued.

Contrast/compare: Pepper I-Prime 2018-1, Liberty Series 2018-3 Trust