Strong international interest continues to pour into Australia’s residential mortgage-backed securities market
La Trobe Financial has priced a $1.5 billion residential mortgage-backed securities (RMBS) deal. It is the largest in the non-bank lender’s history, with investor demand pushing it up from an initial $1 billion.
The deal drew strong offshore interest, with international investors taking nearly 60% of the notes. La Trobe said the highest-rated notes went to three major banks: a leading Japanese global bank, a UK-headquartered international bank and one of Australia’s major banks, none of which was named.
This is La Trobe’s fourth RMBS issue of 2026, taking the lender’s issuance this year to $5 billion and its total since 2014 to more than $22 billion. It has drawn strong demand before, including a $1.25 billion RMBS that attracted strong investor demand in 2021 and its 15th RMBS deal, upsized from $750 million to $1 billion in April 2023.
“This transaction attracted strong support from key investors, both locally and offshore,” said treasurer Paul Brown. “Our RMBS program is one of a number of funding avenues that, when combined, position the business for long-term AUM [assets under management] growth, which in turn delivers for our investors. We thank our RMBS investors for their ongoing support.”
La Trobe said investors are backing the quality of the loans behind the notes, and that it applies the same credit standards in every market. In the 2026 financial year, it reviewed $28.7 billion of lending opportunities and settled approximately $15 billion.
La Trobe’s AUM has climbed to $27 billion, up from $22 billion at the end of 2025, and past the $25 billion milestone it announced in July.
The result comes just over a year after La Trobe Financial moved to reassure its investors when the Australian Securities and Investments Commission (ASIC) issued interim stop orders in September 2025. ASIC lifted the stop orders on La Trobe Financial about a week later.
“We have seen periods of market stress before, and we will see them again,” said chief executive Chris Andrews. “There is no quick fix. There is only discipline and patience to build quality into a portfolio long before it is needed.”
Canadian pension giant joins the share register
Last week, the Ontario Municipal Employees Retirement System (OMERS) agreed to buy an indirect minority interest in La Trobe from Brookfield, subject to regulatory approvals. OMERS is one of Canada’s largest defined benefit pension plans, with $154 billion in net assets.
Brookfield has owned the lender since 2022 and remains its majority shareholder. Abu Dhabi-based private equity manager Axight became a minority shareholder in April 2026.
“Global investors are looking closely at Australia, and we have worked to show them what we have built,” Andrews said. “Three highly regarded global investors are now backing our strategy, which is to pay our investors their income every month and return their capital when they expect it.”
A big year for non-bank RMBS
La Trobe’s deal caps a busy year for non-bank securitisation, with several lenders upsizing deals well beyond their initial targets.
ColCap Financial Group, parent of Granite Home Loans, priced a record $2.7 billion RMBS upsized from a $1 billion guide, at the time the largest ever by an Australian non-bank. International investors took 42% of that deal, as foreign investors poured into the Australian mortgage market.
In September, ColCap broke its own record with a $3 billion prime RMBS, again upsized from $1 billion, with National Australia Bank as arranger.
In June, Brisbane-based Firstmac priced a $2 billion RMBS, the largest Australian deal since the Iran War outbreak. It was upsized from $750 million and priced at 1.08% over the one-month bank bill swap rate (BBSW).
Earlier, in February, Australian Finance Group (AFG) priced its largest-ever RMBS, a $1.2 billion deal through its AFG Securities arm that was upsized from $750 million. MA Money also priced a $1.25 billion RMBS that month, including its first foreign currency tranche.
