Bumper upsizing reflects high confidence, substantial liquidity in Aussie mortgage market
Australian Finance Group (AFG) has issued a $1.2 billion worth of residential mortgage-backed securities (RMBS) through its AFG Securities subsidiary, marking the largest RMBS issue to date for the ASX-listed lender and mortgage aggregator.
The program was upsized from $750 million, which AFG chief executive David Bailey (pictured) called “a fantastic result”.
“Strong demand across all tranches of notes highlights the depth of our RMBS program and reinforces the positive sentiment towards Australian RMBS more broadly,” he said.
AFG received engagement from over 30 domestic and offshore investors, including four new investors. “This demand supported the upsizing of the transaction and enabled us to achieve competitive pricing that was in line with the pricing of our $1 billion transaction in October 2025,” said Bailey.
“These transactions underpin our funding programme and provide cost of funds certainty for a significant proportion of our loan book,” he added.
The upsizing was buoyed by a high degree of liquidity in the Australian RMBS marketplace.
While it can be difficult to predict demand in the RMBS market, “we’ve been through a very, very successful period with AFG Securities… we're delighted to be able to upsize to that level”, said Bailey. “We've been able to demonstrate that we've been creating a track record, and we're creating a track record of flow, both from a customer perspective, but also from an investor perspective.”
AFG primarily targets the prime mortgage market in the fully secured, mid-60-LVR vicinity. It has conducted 20 RMBS issues since listing on the Australian Stock Exchange (ASX) in 2015.
