RAM launches Secured Income Notes targeting 6.55% yield and capital protection

Please note that this interview was recorded Wednesday 10 September 2025

For investors seeking stable income in an environment where traditional fixed income products often disappoint, RAM Group’s new listed notes could represent a timely opportunity. 

The RAM Secured Income Notes (ASX: RAMHA) are designed to offer direct access to Australian mortgage credit, a segment usually reserved for institutions. With a net yield on issue of 6.55%, intended monthly distributions, and a structure focused on capital preservation, the offer arrives at a time when the hunt for yield remains a central theme for income-focused portfolios.

As Scott Kelly, RAM’s Group CEO, explains:

“We believe the notes offer compelling risk-adjusted returns for investors seeking regular monthly income with a big focus on capital preservation.”

The distinguishing feature of this new listed product is RAM’s end-to-end control of the lending process. Through its non-bank subsidiary Brighten Home Loans, the firm originates every loan in the portfolio. That ensures RAM sets the credit standards, approves borrowers, and prices the risk – a rare position for a listed credit product. Kelly emphasises that this “price maker, not price taker” stance, combined with an independent credit rating, makes the structure a transparent and differentiated alternative to many listed credit securities.

In the Fund in Focus above, Kelly covers the structure of the notes, credit protections, RAM’s track record, its alignment with investors, and the broader market forces at play. For income investors weighing their options, RAMHA offers a new way to access mortgage credit – in a listed, secured format.

INTERVIEW SUMMARY

Accessing institutional-grade mortgage credit

Scott Kelly describes RAM Secured Income Notes as a way for investors to gain access to a part of the credit market that has historically been the preserve of institutions. 

“The notes are structured to provide investors with direct access to Australian mortgage credit, which has traditionally been the reserve of institutional investors. 

They’re structured as a bond, they’re senior, they’re secured. They pay 3% over one month BBSW, and their income is paid monthly" says Kelly. 

The target raise is between $150 million and $300 million, with the proceeds deployed into secured loans to gain indirect exposure to a diversified pool of secured home loans. Kelly highlights that RAM originates all the loans through its non-bank lender subsidiary, Brighten. 

“That means two things. Number one, that gives us end-to-end ownership of credit risk. Each one of the 7,200-odd loans in the pool has had a real human credit officer in our firm review the borrower, their situation, and approve the loan or otherwise. Two, we’re not buying credit exposure in the market. We set the rates for the loans, so we are the price maker, not the price taker.”

Risk protections and investor security

Kelly underscores the structural protections built into the notes. 

“In addition to the certain maturity date that I’ve mentioned, the notes are secured with an independent note trustee taking security over all the assets of the issuer.” 

Investors also benefit from RAM’s first-loss contribution: “Investors also benefit from the additional credit protection with RAM providing the first loss subordinated capital of $10 million, which ranks below the listed notes. This will act as a kind of buffer in the unlikely event of a capital loss on the loan portfolio", says Kelly. 

Risk is further reduced by conservative credit policies: “Each individual loan is fully verified in line with our conservative credit policy and the first mortgage security is taken prior to approval of a loan ensuring only high quality loans make it into the investment universe. The average LVR is below 65%, and we don’t have any exposure to property development finance.”

Liquidity and repayment track record

A key investor concern might be whether funds will be repaid on time. Kelly addresses this by pointing to RAM’s long record in the institutional market. 

“We have a track record of paying people back in the institutional market. 

Brighten is supported by eight Australian and international banks that provide warehouse funding. Some of those have been in place for over five years and have supported us as we’ve grown the business and perform deep and continuous due diligence on the loans, our people, and our processes," adds Kelly. 

He goes on to point out that securitisation programs provide further assurance. “We built out three RMBS programmes supported by over 35 institutional investors, which are drawn from Australia, UK, Europe, Asia, and the US. To date, we’ve raised over $3.6 billion from those institutional investors via seven RMBS deals, and every transaction has been called on its first call date.”

RAM’s alignment

Kelly stresses that RAM’s credibility is grounded in its track record and alignment of interests. 

“We haven’t lost a dollar since inception. The stats like arrears tell you that the loan book continues to perform well.” 

He also points to consistent performance across its unlisted funds. “We have an eight-year track record of delivering returns above BBSW plus 3% with zero capital losses and no drawdowns.”

Importantly, RAM itself shares in the risk. “Within the structure, RAM holds the first loss piece of $10 million, as I mentioned, meaning that we will soften the loss before any investors. RAM is 100% staff-owned. So when we talk about being on the hook or skin in the game, it’s our money at risk in these transactions.”

Timing and market environment

Kelly believes the environment supports launching now. 

“One of the features of our firm is that we tend to build products with attractive yields. That’s important in the context of an ageing population that is still yearning for yield.” 

He also points to regulatory shifts. “APRA’s decision to gradually phase out the AT1 bank capital over the next seven years means there’s around $43 billion of capital searching for income-focused products.”

Finally, the interest rate backdrop provides strong support. “The current rate environment means that fixed income returns remain attractive. There are multi-year highs in terms of base rates and absolute yields, with a higher for longer theme playing out. So we think it’s a good environment to launch right now.”