Sector developments and company hires

Non-resident Aussie RMBS debuts
Brighten Home Loan is readying its inaugural RMBS - the A$250m Solaris Trust 2021-1 – which is backed by loans predominantly to non-Australian resident borrowers. S&P notes that the portfolio is not only exposed to macroeconomic events and policies that affect Australia, but also to events and policies that affect the borrowers’ countries of residence. Consequently, the rating agency has applied a higher default frequency to its analysis of the transaction to reflect the wider macroeconomic exposure beyond Australia and the limited asset performance record of a portfolio predominantly comprising of non-resident borrowers.

Approximately 81.5% of the underlying borrowers are residents of China. Westpac securitisation analysts note that such a high exposure to a single country exposes the transaction to potential disruptions in cashflow, due to events or policies affecting the flow of funds between countries.

As such, S&P has compressed default curves in its analysis of the deal to simulate a possible disruption in cashflow to the securitisation trust. The agency also highlights the potential difficulties in managing arrears and servicing the loans, as well as less homogeneity in the underwriting of loans, compared with the underwriting of borrowers who are residents of Australia.

The majority (95%) of the loans are for investment purposes and the pool features a weighted LVR of 60.1%, with no loans greater than 80% LVR, and a weighted average seasoning of 16.8 months.

In other news…

Investment boost for online lender
Digital-lending platform auxmoney has secured a €250m investment for its marketplace loans from Citi and Chenavari Investment Managers. The fintech is now co-investing for the first time alongside partners as part of this transaction. Dan Zakowski, svp marketplace funding at auxmoney, is heading the deal team for the transaction.

SVI adds synthetics verification
STS Verification International has developed a new verification report template and introduced an amended fee schedule to reflect the specifics of on-balance sheet synthetic securitisations, in light of the publication of the new STS Regulation and CRR amendments in the EU Official Journal (SCI passim). Both documents will become effective once the German Federal Financial Supervisory Authority (BaFin) has formally extended SVI's approval as Third Party in accordance with the Securitisation Regulation to include synthetic securitisations. The STS review of synthetic on-balance sheet securitisations will complement SVI's existing service for the STS review of true sale securitisations, as well as additional services, such as the provision of CRR assessments, Article 270 assessments, LCR assessments and gap analyses.