Westpac Bank gears up for second shot at Hastings Funds Management sale

The Hastings Funds Management sale process (mark two) is gathering momentum. 

Street Talk can reveal the infrastructure investment unit is in talks with two strategic bidders as owner Westpac Banking Corp again attempts to drum up a good price. Sources suggested at least one of the suitors was based in Asia and a signed deal was a couple of months away. 

This time, the bank is running negotiations informally and in-house following a failed auction run last year by financial services advisory firm Berkshire Capital. That process attracted TIAA-CREF and Massachusetts Mutual Life Insurance Company, but also saw the departure of key staff which weighed on the auction. 

Hastings has put some recent runs on the board in the past 18 months, despite its bidding consortium missing out on a stake in NSW’s Endeavour Energy. 

In April, Hastings and pension fund First State Super signed a $2 billion-plus deal to operate NSW’s land titles and registry business.

Hastings was also a key member of the group that bought a long-term lease for TransGrid in late 2015. The TransGrid five include including Hastings, Spark Infrastructure, Wren House, Canada’s CDPQ and ADIA.

A Westpac spokesman declined to comment on Hastings on Sunday.

Elsewhere at Westpac, and as first reported by this column, the lender is set to increase rates on new fixed, investor interest-only loans. 

Sources said higher fixed-rates would be announced at Westpac for new investor interest-only loans in coming days. The changes do not include variable rate mortgages.

A Westpac spokesman said the bank did not comment on interest rate movements.  

The slated rate increases follow a crack down by the Australian Prudential Regulation Authority on interest-only and investor loans. The prudential regulator sought to impose speed limits on the growth of lending in these areas, spurring rate changes among the nation’s largest banks. 

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Last week, The Australian Financial Review reported that Commonwealth Bank of Australia was readying to announce bigger deposits, smaller discounts and the scrapping of some rebates in a bid to discourage borrowers from applying for interest-only loans.

The moves, which begin to roll out  on Monday, are in response to regulatory concerns that deferring payment of loan principals is encouraging property buyers to take on too much debt, which makes them vulnerable to financial stress as rates rise from record lows.  

In March, Westpac increased rates on most of its interest-only mortgage book. Westpac announced a series of changes to its fixed loan products but included a small number of discounts.

 

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