November has seen the Northview Group close its ninth securitisation.
The transaction was backed by Kensington Mortgages’ new originations, with a £600 million bond issuance that has been sold to a group of investors.
It increased in size, being initially given a size of £420 million.
The Northview Group has now securitised £4 billion of mortgages since 2015. This latest deal is the second-largest transaction secured by the recent originations of the Northview Group.
The senior tranche priced at 3m Libor +95bps for a duration of c. 2.3 years, and was 1.2x oversubscribed – reflecting the healthy investor demand. The Northview group also sold mezzanine bonds down to BBB ratings.
A total of 16 unique investors were involved in the transaction with a balanced participation between funds and banks. European investors (excluding the UK) accounted for 27% of the demand.
The average loan to value (LTV) at the time of the transaction was 73%, with a weighted average interest rate of 3.8%. The pool included also 20% buy to let loans. Less than 1% of the borrowers in the portfolio securitised were more than one month in arrears at the time of closing. There were no self-certified loans in the portfolio and only 30% of the mortgages were secured against properties in London and the South East.
Across all of Kensington’s lending since 2010, only 11 properties have been repossessed with a cumulative loss of £117,000.
Alex Maddox, capital markets and product development director at the Northview Group, said: “This transaction is further evidence of Northview’s strong track record in accessing the UK securitisation market, with the pricing and the large size a reflection of continued investor confidence in our securities – which reflects the high quality of the new mortgages written under our Kensington brand name.
“High quality investors want access to the high-quality mortgage customers being sourced through Kensington’s unsurpassed underwriting.
“With the Bank of England bringing its crisis-era Term Funding Scheme to an end, an increasing number of lenders have started to access the securitisation markets again as an alternative source of funding.”