What did Judo Capital (ASX:JDO) announce regarding its latest securitisation transaction?

Judo Capital successfully priced a $750 million capital-relief securitisation transaction backed by small and medium enterprise (SME) business loans. Strong interest from domestic and international investors allowed the challenger bank to upsize the deal from its initial $500 million launch target.

Why does this securitisation transaction matter for Judo Capital (ASX:JDO) investors?

This transaction qualifies for regulatory capital relief, which strengthens the bank's balance sheet without altering how its underlying loans are reported. It allows Judo to generate net interest margins on these SME loans without needing to hold regulatory capital against them, unlocking greater financial flexibility.

How do the borrowing costs of this deal compare to Judo Capital’s (ASX:JDO) previous transactions?

The notes priced at a weighted average of 171 basis points over the 1-month Bank Bill Swap Rate (BBSW). This represents a major 102-basis-point improvement compared to Judo’s inaugural September 2023 transaction, which was priced at 273 basis points over the 1-month BBSW.

What is the impact of this deal on Judo Capital’s (ASX:JDO) Common Equity Tier 1 (CET1) ratio?

The transaction boosts Judo’s regulatory capital position significantly. On a pro forma basis as of 31 March, the bank's CET1 ratio increases to 13.2 per cent, up from the previously reported 12.6 per cent.

How will this transaction affect Judo Capital’s (ASX:JDO) return on equity (ROE)?

The capital-relief structure is highly accretive and is estimated to deliver a 25 to 30-basis-point pro forma benefit to Judo's FY27 ROE. This efficiency stems from the bank's ability to maintain interest income from the SME loans while freeing up capital.

Will this transaction change how Judo Capital (ASX:JDO) reports its loan book?

No, the transaction does not impact the accounting or reporting of loans in Judo's books. The underlying SME business loans will continue to be reported as gross loans and advances, and they will keep generating regular interest income for the bank.

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Judo Capital upsizes securitisation deal to $750M

Written by Brie CarterPublished May. 29 2026Last Updated May. 29 2026

Judo Capital (ASX:JDO) priced a $750 million capital-relief securitisation transaction backed by small and medium enterprise business loans.

Driven by strong domestic and international investor support, the challenger bank upsized the deal from an initial $500 million launch amount.

The notes are priced at a weighted average of 171 basis points over the 1-month Bank Bill Swap Rate, marking a 102-basis-point improvement over Judo’s inaugural September 2023 transaction, which was priced at 273 basis points.

The transaction qualifies for regulatory capital relief, boosting Judo’s Common Equity Tier 1 ratio.

On a pro forma basis as of March 31, the CET1 ratio rises to 13.2%, up from the reported 12.6%.

While the underlying SME loans will still be reported as gross loans and advances to generate interest income, the capital-relief structure makes the deal highly accretive to Judo’s return on equity.

It is estimated to deliver a 25 to 30-basis-point pro forma benefit to FY27 ROE by allowing the bank to generate a substantial net interest margin without holding capital against these assets.

Judo’s CEO Chris Bayliss stated that the transaction strengthens the bank's CET1 position, increases lending flexibility, and demonstrates multiple levers to actively manage capital with increased optionality for future initiatives.

Settlement is officially expected to occur on June 4.

At the time of reporting, Judo Capital’s share price was $1.52.