The AOFM, through the ABSF, aims to enhance the development of the securitisation market’s capacity to support both private and public transactions backed by loans to SMEs. Since making its first investment in 2020, the ABSF has invested in seven private warehouse facilities and provided partial underwrites to seven public term transactions. The ABSF is currently invested in five warehouses and two public term transactions.
ABSF investment requires contemporaneous private sector co-investment. To date, the AOFM estimates that ABSF commitments have realised private sector co-investment of around three times that of the ABSF.
Between the ABSF investments and the private sector co-investment, approximately $8 billion of lending has been extended to around 70,000 SMEs over the past seven years.
Supporting securitisation market development, nearly the entirety of this lending has been reported to a defined standard (the Australian Securitisation Forum’s SME Data Template), representing a considerable deepening of the data available, in a consistent format, to wholesale investors. It is expected to support their capacity to invest in private and public transactions backed by loans to SMEs.
Specific investment activities undertaken since the 20 February 2024 release have included:
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The commitment to a facility sponsored by OnDeck has been fully refinanced by a third-party financier, allowing for the recycling of this capital into new investments.
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An existing commitment to Dynamoney has now been converted to an investment in its facility.
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New commitments have been made and converted to investments in facilities sponsored by Banjo Loans ($90 million) and Laddr ($75 million).
During the past two years, the ABSF also provided partial underwrites across seven public term transactions sponsored by Prospa, Shift, Dynamoney, and Judo Bank. While the ABSF was scaled out on four of these transactions, its participation was noted as a key factor in managing execution risk before launching, and in upsizing. All partial underwrites have been made under the guidance previously provided to the market in ABSF Update – Public Term Transactions and Updated ABSF Advice – Public Term Transactions.
The AOFM would like to take this opportunity to thank its advisors, the transaction structurers, co-investors, and sponsors on all of the above transactions.
The AOFM continues to receive and assess ABSF proposals. The AOFM will offer proponents the opportunity for deeper engagement prior to their making a draft submission. This will support informing the AOFM Impact Investment team when assessing subsequent proposal eligibility for ABSF investment.
To facilitate this engagement, the AOFM will establish, at a proponent’s request, a secure file transfer facility where an ABSF proponent can lodge information and data pertaining to their business. This can include, but is not limited to, information such as extended company financial data and strategies, product and credit policies, loan portfolio details, and loan default and loss data. There is no time frame requirement between establishing the file transfer facility and any subsequent proposal submission.
Instructions on making a submission for ABSF investment can be found on the AOFM website under Access the ABSF and proponents are encouraged to contact the AOFM at absf@aofm.gov.au.
