Aldermore enters securitisation market in £330m mortgage deal
CHALLENGER bank Aldermore is selling off £330m of prime residential mortgages in its first ever securitisation, the lender said yesterday.
The bank wants to reduce its reliance on the Bank of England’s Funding for Lending Scheme (FLS) and raise funds to increase its lending volumes.
Mortgage-backed securities got a bad name in the financial crisis after sub-prime loans were wrapped into unusual structures and treated by credit ratings agencies and investors as high quality assets.
But Aldermore is selling these loans as exclusively first-ranking owner-occupied UK mortgages, with no self-certified, offset or right-to-buy loans which could lower the credit quality.
JP Morgan is acting as sole arranger and bookrunner, finding investors for the sale, while Lloyds is also joint lead manager.
“This reduces reliance on the FLS and widens the bank’s wholesale capabilities, establishing a stable platform for ongoing asset-backed funding subject to market conditions,” said a spokesperson.