Bluestone issues inaugural $700m Bluestone Prime securitisation

RMBS transaction deal

Today, 21 July 2021, Bluestone is proud to announce the successful issuance of Bluestone Prime 2021-1, its first RMBS transaction of 2021. The $700m deal marks Bluestone’s 32nd mortgage-backed issuance and the first under the Bluestone Prime programme.

Bluestone has been originating Prime mortgages since 2019, and today these mortgages represent over 80% of Bluestone’s total origination volume. In addition, in 2021, Bluestone entered into a partnership with Athena Home Loans, an originator of high quality, low LVR Prime mortgages, which will allow it to purchase approximately $2.5 billion of loans over the next three years, with the first tranche of $320m acquired in May 2021. The securitisation benefits from both the Bluestone and Athena loan pools. Approximately $400m of the deal is sourced from Bluestone and the remaining $300m from Athena.

Todd Lawler, Managing Director – Treasury and Funding at Bluestone, said of the deal: “The team is incredibly proud to launch our new Prime securitisation programme. The first issuance has already received overwhelming interest and support from investors, reflecting the excellent credit quality of the underlying pool, validation of the partnership with Athena and support for the programmatic issuance of prime deals going forward.”

The pool consists of 100% Prime full-documentation loans, and the deal is fully CRD IV compliant. Strong domestic and offshore investor interest means the transaction was almost 1.7 times oversubscribed, with some tranches receiving more than 5 times coverage. In total, 26 investors bid in the trade with 60% of bids coming from offshore.

We anticipate that the Bluestone Prime programme will issue two to three securitisations per year off the back of Bluestone originations and loans acquired from Athena. This structure will generate very high quality securitised pools that Bluestone will issue to market on a regular basis. Bluestone will continue its well-supported Sapphire non-conforming programme with an estimated one to two deals annually.

This deal sets Bluestone well on its path to increase origination activity for the remainder of 2021. Bluestone CEO Campbell Smyth said: “The issuance of Bluestone Prime 2021-1 tops off a fantastic July, having launched our new digital core platform earlier in the month delivering industry-leading technology and processes to drive exceptional broker and borrower experiences.