UK Mortgages completes £209m fourth securitisation – UK Mortgages (UKML) has announced the successful public sale of £209.15m senior securitised notes. The securitisation is backed by a pool of owner-occupied mortgages originated by The Mortgage Lender (TML) completed between October 2016 and today. It has been purchased by on a forward flow basis by UK Mortgages Corporate Funding Designated Activity Company (DAC).
We note that the transaction also contains a “prefunding” feature which allows for further purchases of future completions by TML up until the securitisation’s first interest payment date in August 2019.
Two tranche structure
UKML says the origination of the pool of loans took place over more than two years and were originated with a two-year fixed rate term are expected to pre-pay relatively quickly and therefore the notes were split into two tranches – £202.2m of Class A notes, rated Aaa/AAA by Moody’s and DBRS, and £6.95m of Class B notes rated Aa1/AA (high) respectively.
About UKML
UKML aims to provide shareholders with access to stable income returns through the application of relatively conservative levels of leverage to portfolios of UK mortgages. The company expects that income will constitute the vast majority of the return to shareholders and that the return to shareholders will have a relatively low volatility and demonstrate a low level of correlation with broader markets. The company targets a net total return on the issue price of between 7% and 10% a year.
UKML: UK Mortgages completes £209m fourth securitisation