Whole-loan sector gaining favour

Pepper Homeloans, one of Australia's leading players in the non-conforming mortgage loan market, has secured a second whole-loan sale to Record Investments, with the two companies putting in place a mutually extendable $250 million deal. Pepper will receive an upfront payment and get an ongoing share of the loan book in the deal which is part of its ongoing funding strategy.

Richard Klemmer, Pepper's CEO, said the deal with Record Investments confirms whole-loan sales as an alternative to securitisation as a source of funding within the non-conforming mortgage sector. Pepper will continue utilising both securitisation and whole-loan sales, he stated.