MELBOURNE – 30 March 2017: Latitude Financial Services, a leading consumer finance business in Australia and New Zealand, has successfully priced its inaugural Australia Credit Card Master Trust transaction.
The Latitude Australia Credit Card transaction, which launched on March 27 utilises an innovative new structure in the Australian securitisation market and was well supported across all tranches, upsizing from Au$750m to Au$1bn, with significant over-subscriptions levels of 3.2 times across the entire capital structure.
The deal utilises a master trust structure like those used in the UK and US, which enables efficient future issuances for this asset class, the first time such a structure has been utilised by an Australian securitisation issuer. The assets backing the securitisation notes are credit-card receivables.
Latitude Financial Services Treasurer, Paul Varro, said the transaction was a successful first for Latitude in the market. "We are extremely pleased with the success of this inaugural issuance which we believe provides a strong platform for Latitude's future issuance strategy."
"The significant level of investor engagement and support for Latitude's inaugural deal, demonstrated by the high-quality mix of local and offshore investors, has ensured a successful inaugural transaction that only enhances our existing funding platform. The transaction has included 36 investors across Europe, U.S., Asia, Australia and New Zealand, emphasising a high-level of local and global interest in Latitude."
Varro said the positive reaction from the market highlighted high demand for new asset classes and strong support for a new issuer such as Latitude.
The deal's sole arranger, Bank of America Merrill Lynch, has collaborated with joint lead managers, Deutsche Bank, and National Australia Bank, structuring a three-year revolving period, with a soft bullet repayment structure, followed by a one-year scheduled amortisation. The notes on offer had ratings ranging from AAA to BB, with ratings from Fitch, S&P and DBRS. Clifford Chance acted as legal advisers to Latitude in documenting the transaction.
Latitude, which was acquired by a private-equity consortium in 2015, has 2.6 million existing customers operating across a range of financial services products including personal loans, credit cards, insurance, and interest-free promotional and retail offers.
About Latitude Financial Services
Latitude Financial Services is a leading consumer finance business in Australia and New Zealand, offering 2.6 million customers a broad range of finance products including personal loans, credit cards, insurance, and interest-free promotional and retail offers. Across Australia and New Zealand, the business currently employs more than 1,800 staff and services its customers through a network of retailer partners, brokers, phone, and the internet. The company offers a full suite of financing solutions for retail partners, managing credit applications, credit authorisation, billing, remittance, and customer service processing. Its products include Gem Visa, GO MasterCard and 28 Degrees Platinum MasterCard.