ANZ and NAB Help Finance Blackstone's $25 Billion Buy of HSBC Australia's Mortgage Book

The financing details are filling in

Blackstone's deal to buy HSBC's entire A$36 billion (US$25.3 billion) Australian retail loan portfolio was announced on a Friday, and the question since has been how the private equity giant plans to fund it. According to the Australian Financial Review, cited by Bloomberg through the Business Times, the answer is now clearer: ANZ and National Australia Bank are among the lenders backing the deal, alongside foreign banks in a broader debt syndicate.

Blackstone has arranged at least A$30 billion in senior debt through a privately offered residential mortgage-backed securitisation, the AFR reported, citing unnamed sources. That's the vast majority of the purchase price coming from borrowed money, structured against the mortgage pool itself, not Blackstone's own balance sheet.

ANZ did not respond to a Bloomberg email sent outside office hours. NAB declined to comment. Neither bank has confirmed the reporting on the record, and the figures come from unnamed sources cited by an Australian outlet, not a joint statement from the parties involved.

What happens next in the deal structure

Blackstone and the lenders plan to bring a public securitisation deal to credit funds and other institutional investors within 12 months of taking ownership, according to the AFR reporting. That means the private debt arrangement now being put together is a bridge, not the final structure. Expect a broader capital markets offering sometime after the deal closes.

The deal is expected to close in the first half of 2027, subject to regulatory approval. Pepper Money, the domestic shadow lender backed by KKR, will service the loan portfolio for Australian customers once the deal is finalized.

Why a servicer even matters here

This is the part that gets buried in the finance headlines: Blackstone is a credit fund, not a bank. It doesn't run branches or answer customer calls. That's exactly why Australian consumer credit law requires a licensed entity to manage the day-to-day relationship with borrowers.

Obligations under the National Consumer Credit Protection Act, and the requirement to hold an Australian Credit Licence, attach to whoever is actually dealing with the customer, not whoever owns the loan on paper. That's why Pepper Money has to be in the picture at all. The Finance Brokers Association of Australia's chief executive, Leo Gagic, has urged brokers to proactively reach out to affected HSBC customers as the transition unfolds, calling such announcements an opportunity for brokers to connect with customers and build trust.

HSBC has said customers can keep banking as normal for now, with no action required at this stage, and that further detail on product changes will come later. The remainder of HSBC Australia's retail business not covered by the sale will be wound down in a phased manner over the next 18 months, part of what HSBC calls a broader simplification of the HSBC Group globally. The disposal is expected to generate an immaterial loss for the HSBC Group.

The bigger picture for private credit in Australia

This is the largest private credit takeover of an Australian mortgage book on record, according to MPA (Mortgage Professional Australia). It follows Westpac's A$21.4 billion sale of its RAMS portfolio to a consortium that included KKR and Pepper Money, meaning Pepper Money is now the common servicing thread across two of Australia's biggest mortgage-book sales in recent memory.

Dan Leiter, Blackstone Credit & Insurance's head of international, called the deal a sign of Blackstone's conviction in "the growing opportunities in credit across Asia." Mike Culhane, the firm's head of international business development for asset-based finance, said Blackstone intends to oversee the portfolio "thoughtfully and with discipline" and remains "committed to Australia as a highly attractive market for long-term credit investment." Pepper Money's chief executive, Mario Rehayem, said the company's appointment as loan manager "reflects the strength of our established platform and our experience supporting customers across large, complex portfolios."

Is this good for Australian borrowers, or just good for Blackstone? The honest answer is it's untested. Private credit funds buying up bank mortgage books is a relatively new phenomenon in Australia, and this deal, layered with A$30 billion in borrowed money against the loan pool itself, adds a leverage question on top of the ownership question. HSBC's retail customers aren't voting on any of this. They're just along for the ride while a private equity firm and a shadow lender figure out who answers the phone when they call about their mortgage.

What's still unresolved

HSBC has not detailed exactly what product changes customers should expect once the transition happens. The public securitisation Blackstone plans to bring to institutional investors within a year of closing hasn't been priced or structured yet. And the full list of foreign banks in the debt syndicate beyond ANZ and NAB hasn't been disclosed. Those details will matter once the deal closes in the first half of 2027 and real dollars start moving.