Pepper Residential Securities Trust No. 25: 08 November 2019
As per previous Pepper issues, this issuance consists of notes backed by a pool of non-conforming mortgages originated by Pepper Homeloans Pty Limited through accredited mortgage aggregators and third-party brokers, and is secured by properties located in Australia. As per the previous deal, this transaction also features a US$ and Euro tranche.
The Eligibility Criteria for each mortgage loan (includes): is denominated in, and only payable in, Australian dollars; requires monthly or fortnightly payments sufficient to pay interest and fully amortise the principal over the loan term; the Debtor has no ability to make further advances under the Mortgage Loan other than with the consent of the relevant Warehouse Trustee in its entire discretion; the Debtor has no right to convert from a variable loan to a fixed rate in respect of the Mortgage Loan; the Mortgage Loan is not a construction loan.
At the cut-off date the portfolio consists of 1,617 consolidated loans secured by first registered mortgages over residential real estate, where the average consolidated mortgage loan balance is A$464,684. Documentation level (by number of loans / current balance): Full 1,077/60.03% and Alt 540/39.97%. Distribution by Occupancy Status: Owner Occupied - 64.43%, Investment - 35.57%. Distribution by Repayment Type: Principal and Interest - 71.7%, Interest Only - 28.21%. Geographic Location: NSW Metro 30.20%, VIC Metro 28.15%, NSW Non-Metro 10.46% and Queensland Metro 6.88%.
EU Risk Retention: On the Closing Date and thereafter for so long as any Offered Notes remain outstanding Pepper will, as an “originator”, retain a material net economic interest of not less than 5% in this securitisation transaction in accordance with the text of Article 6(1) of the EU Securitisation Regulation. As at the Closing Date, the EU Retention will be in the form of pro rata retention in each of the tranches sold or transferred to investors as provided for in option (a) of Article 6(3) of the EU Securitisation Regulation, and will be comprised by Pepper holding 100% of the shares in the Retention Vehicle which will hold not less than 5% of the aggregate Invested Amount of each Class of Notes issued (“Retention Notes”).
US Risk Retention: Pepper intends to satisfy the US risk retention rules by acquiring on the Closing Date and retaining, through one or more majority-owned affiliates, an eligible vertical interest (EVI) in the form of not less than 5% of the Invested Amount of each Class of Notes, determined as of the Closing Date. Pepper holds 100% of the shares in the Retention Vehicles which will hold the EVI Retained Notes.
Compare/contrast: Pepper Residential Securities Trust No.24