10 September
AFICO is pleased to announce that on 10th September 2020 the Australian Office of Financial Management (AOFM) invested $9.5 million into a securitised warehouse trust (AFS AUTO-1 Trust) managed by its subsidy Automotive Financial Services Pty Ltd (AFS).
The AFS AUTO-1 Trust is an asset backed security (ABS) trust that specializes in financing motor vehicles, light commercials and other mobile assets for consumers, businesses and self-employed individuals.
The AOFM invested into AFS AUTO-1 Trust via the newly created Structured Finance Support Fund (SFSF).
The SFSF was announced by the government in March as a $15-billion investment fund, established to support continued access to funding markets for small and medium enterprises (SMEs) impacted by the economic effects of the Coronavirus, and to mitigate impacts on competition in consumer and business lending markets.
Under the SFSF, the Australian Office of Financial Management (AOFM) has made various targeted investments in structured finance markets used by smaller lenders that provide consumer and business finance, invested in rated term securitisations and in rated and unrated securitisation warehouses.
The $9.5 million investment in AFS’ warehouse facility has been made via two separate subscriber notes:
The SFSF investment will sit alongside existing senior debt provider, Westpac Banking Corporation with AFS subscribing to the subordinated note and providing the first loss position.
Executive Director of Automotive Financial Services, Brad Dale, said:
“We are delighted that the government extended the mandate for the Structured Finance Support Fund to recognise and assist small lenders like AFS.”
“The AOFM investing $9.5 million into Automotive Financial Services, is testimony to the important role that small lenders play in the Australian credit landscape in rounding out the generic product offering made by the mainstream banks.”
Mr Dale added, “Whilst we are still working through the impacts of the coronavirus pandemic as a community, lenders have been grappling with the need to provide credit responsibly to stimulate economic activity and adapting strategy to operate in an everchanging environment.”
“The support provided by the AOFM enables AFS to consider its future strategic direction and initiatives with confidence.”
Since the launch of the SFSF in March, the AOFM has made primary market investments in Firstmac, Liberty, and RedZed, secondary market investments in Colombus Capital, LaTrobe, Liberty, Metro Finance, Pepper, Resimac and Thinktank, and warehouse investments in an array specialty lenders including AFG, Allied Credit, Athena Home Loans, Bluestone, Columbus Capital, Credabl, Judo Bank, Latitude Financial, Prospa, Scottish Pacific, Wizr and now Automotive Financial Services.
The SFSF’s investments in primary and secondary public term transactions, and commitments under private warehouse transactions, can be found in the following spreadsheet (SFSF_Reporting.xlsx) as updated by AOFM from time to time.
AOFM invests $9.5 million in AFS warehouse.
Automotive Financial Services Pty Limited ACN 003 622 375 Australian credit licence 383762 (AFS) – a licensed credit provider that was founded in 1988.