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How to Engage with the AOFM to Access the Structured Finance Support Fund

31 March 2020

Eligibility

The SFSF is open to smaller lenders who access finance through securitisation.

Lenders who are eligible for access to the SFSF must be either:

  1. A non-ADI lender, (regardless of size); or
  2. An ADI (Authorised Deposit-taking Institution) that does not have the capacity to provide the collateral that is acceptable to the Reserve Bank of Australia (RBA) under a term funding facility (and is not a subsidiary of another ADI that does have access to such a facility).

Information regarding eligible and ineligible investments can be found in the legislation, rules and direction of the SFSF. 

Advice for lenders with term public securitisation deals ready to launch

Please contact your lead manager for advice

We are open to direct approaches from lenders who are ready to launch deals.

We reserve the right to discuss the transaction with the lead manager(s).

We will be predisposed to transactions with substantive support from other investors.

Advice for lenders with existing warehouse providers

We are actively engaging directly with warehouse providers and advise that lenders in this category should approach their warehouse provider now, for assistance in setting out expressions of interest.

After consulting with your warehouse provider, please make an expression of interest.

We reserve the right to discuss the extension of an existing warehouse with other existing financiers of the same warehouse once we have received an expression of interest from a smaller lender.

Expressions of interest from lenders

We are looking to register the following information from qualified smaller lenders (as defined above). If you have a warehouse provider, please contact them in the first instance and they will provide additional guidance.

Business

  1. A brief description of your business.

Funding

  1. How are you funded? Please provide the following information across all of your business lines:

Source of funds  

$ Amount

(e.g. bank loan, warehouse, term securitisation etc.)

 

Warehousing

  1. Do you have a warehouse or are you currently negotiating with a warehouse provider?
    • Who is/are the senior lender(s)?
    • What is the size of your current warehouse(s) and when does it/they mature?
      •  Are you currently negotiating with your provider(s) for extending your warehouse(s)? If so, what stage of negotiations are you at?
      •  What stage are your lenders at with securing participation of mezzanine lenders in the warehouse?

Public Deals

  1. Do you have any public deals?
    • Do you engage in risk retention? If so, to what level and in what form does your risk retention occur?

Portfolio (as at 20 March 2020 and expected to be updated weekly)

  1. What is the outstanding volume and number of loans in your portfolio (by product line)?
  2. What is the outstanding volume and number of loans in arrears in your portfolio (by product line)?
  3. What is the outstanding volume and number of loans in hardship in your portfolio (by product line)?

Other

  1.  Any other details you deem relevant.

Where we engage in an SFSF transaction further information may be required.

Advice for lenders not currently accessing finance through securitisation

To access the SFSF, smaller lenders need to access their finance through securitisation. Where the lender does not access their finance through securitisation they should seek advice on how they can adjust their funding model to access the SFSF. The Australian Securitisation Forum (ASF) is able to provide more information on securitisation. Go to https://www.securitisation.com.au/

Whilst we are not able to assist smaller lenders other than through securitisation, we will register responses to any of the eight questions in the ‘EOI from lenders’ section (above) that they are able to answer. This means that should these lenders be able to adjust their structure (to include securitisation) we will already have basic information on their entity and loan portfolio.

Advice for lead managers or warehouse providers

Please email sfsf@aofm.gov.au

More information on the SFSF

The legislation and rules set out the authorised and proscribed investments for the SFSF. These require the SFSF to invest in securities other than ‘first loss’ securities issued by a securitisation vehicle, supported by a wide range of collateral.

The Government has also issued the AOFM with a Direction that sets out the investment strategies/policies, decision-making criteria and appetite for risk and return for the SFSF. These are designed to assist us to prioritise between investments.

The SFSF has the flexibility to operate in primary and secondary markets for term securitisation transactions (RMBS/CMBS/ABS) and new and existing warehouses in order to achieve its mandate.

We are currently working with the ASF and industry more broadly to accommodate the matter of forbearance and its impact on securitisation vehicles.