NZF Group's $100 million residential mortgage backed securities offer has closed, with institutional investors' strong interest encouraging the financial services firm to aim for another issue later this year.

NZF Group's offer of the securities was the first of its kind in New Zealand since 2007. The $100m offer includes $87.8m of AAA-rated notes, backed by a package of 403 properties and mortgage loans to 348 borrowers.

Managing director John Callaghan would not name the investors who bought the notes, but said residential mortgage backed securities (RMBS) were in demand from institutional investors. "There are investors looking for AAA products and quality RMBS. This offer is really about re-establishing the RMBS market in New Zealand."

NZF Group's offer was a "plain vanilla mortgage book offer" that was easy for investors to understand. RMBS had fared well in both New Zealand and Australia during difficult economic conditions, he said.

The offer's non-rated and AA- rated notes were held by NZF Group as the firm still had an interest in this type of product, he said.

NZF Group provides a range of financial services including home loans, consumer loans and debentures. It is also half-owner of Mike Pero Mortgages with Australian specialty finance group Liberty Financial.

NZF Group, formerly New Zealand Financial Holdings, posted a $4.6m March year loss, writing off close to $7m on its Mike Pero investment. This came after ratings agency Standard & Poor's assigned NZF Group subsidiary NZF Money a B rating for both its short and long-term debt in February, citing its "weakly capitalised parent".