Pepper Money agrees to buy HSBC’s New Zealand mortgage portfolio
Australian non-bank lender Pepper Money has signed a binding agreement to acquire HSBC’s NZ$1.4 billion mortgage portfolio in New Zealand.
Subject to approval by the New Zealand Overseas Investment Office, the deal is expected to close in late November, following which the pair will work towards a “smooth and efficient” transition for its customers.
On completion, the acquired portfolio is expected to be worth NZ$1.4 billion in outstanding balance, supplementing Pepper Money’s existing business with its current assets under management standing at A$18.9 billion.
Mario Rehayem, Pepper Money’s CEO, says the acquisition of the mortgage portfolio marks a “further step in our growth strategy” as it looks to expand its operations in New Zealand, “a market which we understand well having serviced mortgages and delivered compelling customer service since 2011”, when it acquired GE Capital’s Australian and New Zealand Home Lending business.
Pepper Money states it will fund the acquisition “in a similar way to which we fund our loan origination activity”, namely a combination of senior and mezzanine funding with Pepper Money contributing the first loss equity.
“The portfolio being acquired is a prime, seasoned and well performing portfolio, and the level of first loss required reflects this,” Pepper Money says.