La Trobe Financial expands RMBS platform while losses remain at 0.03%

RMBS programme reaches $20.1 billion

La Trobe Financial’s securitisation platform has reached a sizeable milestone without a corresponding deterioration in reported credit performance. The 12-trust annual report covering the year to 30 June 2026 says 23 residential mortgage-backed securities transactions have now issued $20.1 billion of bonds since the programme began in March 2014, while cumulative losses have amounted to 0.03% of original issuance volume.

The programme also remained active after balance date. La Trobe Financial Capital Markets Trust 2026-3 completed a $1.25 billion transaction secured by Australian prime and non-conforming residential mortgages. The manager said it expects to maintain a regular issuance programme of two to three transactions a year, although the report does not provide terms or performance data for the new trust beyond its transaction size.

Newer pools carry most of the growth

The pool data shows the securitisation platform shifting towards larger, younger portfolios. LFCMT 2026-1 held a $917.3 million loan portfolio at 30 June, while LFCMT 2026-2 held $850.8 million across 1,500 loans. The latter had a weighted average loan-to-value ratio of 67.7%, an average loan size of $567,211 and average seasoning of 2.1 years.

Those newer pools also account for much of the reported credit-loss provisioning. The credit loss allowance stood at $1.45 million for LFCMT 2026-1 and $1.21 million for LFCMT 2026-2, after charges of $1.45 million and $1.21 million respectively during the reporting period. The figures are provisions, not realised losses, and the trusts’ accounting policy uses forward-looking scenarios that assign 60% weight to the most probable case, 20% to a less favourable case and 20% to a more favourable case.

Funding and liquidity remain central

The newer trusts were funded with substantial note issuance. LFCMT 2026-1 had $1.25 billion of notes issued and a closing noteholder balance of $973.3 million after repayments, while LFCMT 2026-2 had issued $1 billion and ended with a noteholder balance of $1.003 billion. LFCMT 2026-2 also reported $156 million in operating cash and reserves, alongside a $15 million undrawn liquidity facility.

That liquidity disclosure matters because the report says draws were made during the year on facilities associated with LFCMT 2025-1 and LFCMT 2026-1. The accounts also show a small estimated charge-off of $36,000 for LFCMT 2026-2. Ernst & Young issued an unmodified audit opinion, while highlighting that called trusts must be prepared on a liquidation basis.

Trust lifecycle creates a moving target

Comparisons across the portfolio require care. LFCMT 2021-2 was wound up in September 2025 and LFCMT 2022-1 in June 2026; LFCMT 2022-2 was called in May but had not yet been wound up at reporting date. At the same time, LFCMT 2025-1, LFCMT 2026-1 and LFCMT 2026-2 were established during the year, leaving limited or no comparative history for those vehicles.

At group level, La Trobe Financial reported assets under management of $24.9 billion at 30 June, up from $20.8 billion a year earlier. That measure covers the broader La Trobe Financial business rather than only the ASX-listed trusts, so it should not be read as the size of this RMBS portfolio. The more pertinent test for noteholders is whether the newer, rapidly growing pools maintain the low-loss record claimed for the programme as they season.