Harmoney secures up to NZ$200 million in debt funding from M&G Investments

ASX/NZX release

Harmoney secures up to NZ$200 million in debt funding from M&G Investments

Harmoney Corp Limited (ASX:HMY) (Harmoney or the Company), Australasia’s largest online direct personal lender, has secured its third debt warehousing facility, from M&G Investments (“M&G”), a leading global asset management firm.

The NZ$200 million facility* will help to grow Harmoney’s loan originations; accelerate the transition to a 100% warehouse funding model; and support the expansion of Harmoney’s product offering to more consumers across Australia and New Zealand.

M&G joins two of the ‘Big Four’ banks as Harmoney funding partners. Harmoney’s committed warehouse funding is now more than NZ$465m.

M&G’s funding is a 3 year committed facility of up to $200m. The global asset manager is the senior and mezzanine lender.

David Stevens, CEO of Harmoney, said: “This is a great milestone for Harmoney, further accelerating our transition to more profitable warehouse funding, and reflects our ability to unlock further loan origination capacity so we can continue innovating the borrowing experience for our consumers. We are really excited to have the support of this well respected institutional asset manager. Our ability to attract a partner of their calibre and establish a securitisation of this size in a post-COVID market reflects the quality of our business, and the confidence Harmoney continues to earn from fixed income investors.”

Matthew O’Sullivan, Head of Asia Pacific Origination at M&G Investments, said: “M&G is excited to be working with Harmoney to help expand their ability to lend to consumers and we are pleased to be able to support the financial recovery within New Zealand.”

As at December 2020, warehouse funding comprised 42% of Harmoney’s loan book, with the transition to being fully warehouse funded on target to be substantially completed during H2 FY2022. This transition is strategically aligned to Harmoney’s growth objectives and ability to amplify Customer Lifetime Value.

Harmoney began the transition from a peer-to-peer funding model to a warehouse funding model in December 2018 with the establishment of its first New Zealand warehouse facility. Harmoney established its first Australian warehouse facility in January 2020.

ENDS

Authorised for release to ASX/NZX by the Board of Harmoney Corp Limited.

* a combination of senior note and mezzanine note funding provided by M&G Investments with Harmoney the Junior note holder

About Harmoney

Harmoney is an online direct personal lender that operates across New Zealand and Australia providing customers with unsecured personal loans that are easy to access, competitively priced (using risk-adjusted interest rates) and accessed 100% online.

Since originating its first loan in August 2014, Harmoney has originated over NZ$1.8 billion in personal loans (growing at a compound annual growth rate of 86% between FY15 and FY20), serving more than 47,000 customers and increasing its total current loan book to approximately NZ$472 million.

Harmoney’s proprietary digital lending platform, Stellare™, facilitates its personalised loan product with applications processed and loans typically funded within 24 hours of acceptance by the customer. Stellare™ applies a customer’s individual circumstance to its data-driven, machine learning credit scorecard to deliver automated credit decisioning and accurate risk-based pricing.

About M&G Investments

M&G Investments is part of M&G Plc, a savings and investment business which was formed in 2017 through the merger of Prudential plc’s UK and Europe savings and insurance operation and M&G, its wholly owned international investment manager. M&G Plc listed as an independent company on the London Stock Exchange in October 2019 and has £339 billion of assets under management (as at 30 June 2020). M&G Plc has over 5 million customers in the UK, Europe and Asia, including individual savers and investors, life insurance policy holders and pension scheme members.

For nearly nine decades M&G Investments has been helping its customers to prosper by putting investments to work, which in turn creates jobs, homes and vital infrastructure in the real economy. Its investment solutions span equities, fixed income, multi asset, cash, private debt, infrastructure and real estate.

For more information, please visit: https://global.mandg.com/

For queries please contact:

Investors

David Stevens
CEO & Managing Director
investors@harmoney.co.nz

Media

Courtney Howe
+61 404 310 364
courtney@domestiqueconsulting.com.au

About Harmoney

Harmoney’s purpose is to help people achieve their goals through financial products that are fair, friendly, and simple to use.

Business fundamentals

Harmoney provides unsecured personal loans of up to $70,000 for three, five or seven year periods to customers across New Zealand and Australia
Its direct-to-consumer and automated loan approval system is underpinned by Harmoney’s scalable Stellare™ proprietary technology platform
A significant percentage of Harmoney’s originations are “3R” (repeat) customers, with losses on repeat loans approximately 40% lower than first time loans
Harmoney is comprised of a team of 69 full-time employees across Australia and New Zealand, over half of whom comprise engineering, data science and product professionals
Harmoney is funded by a number of sources including two “Big-4” bank warehouse programs across Australia and New Zealand and a facility from M&G Investments