Grand Canal Securities 2: 02 December 2017
A stand-alone issuance and a similar transaction to the earlier Grand Canal 1, where on this occasion the Issuer will make payments on the notes from payments of principal and interest received from a portfolio comprising mortgage loans originated by Irish Nationwide Building Society (including Anglo Irish Bank, Irish Bank Resolution Corporation, Hill Samuel (Ireland) Ltd, Scottish Legal Trustee Ltd, Irish Industrial Building Society and Irish Mutual Building Society) and Springboard Mortgages Limited to borrowers, secured on properties in Ireland to be acquired by the Issuer from the Beneficial Title Seller on the Closing Date.
The Beneficial Title Seller, Mars Capital Ireland Holdings DAC, was established for the purposes of acquiring residential mortgage loans advanced to borrowers in Ireland, and other assets. The Master Servicer, MCFID, is a 100% subsidiary of Mars Acquisition Limited and, since 2015, MCFID has acted as credit servicer in respect of more than €1 billion of Irish mortgage assets. The Market Portfolio Purchase Agent, Mars Capital Finance Limited, is a 100% subsidiary of Mars Acquisition Limited. Mars Capital Finance Limited acquires, originates (through its brand Magellan Homeloans) and administers commercial and residential mortgage loans advanced to borrowers secured on properties in England and Wales, Northern Ireland and Scotland.
As at the cut-off date (30 June 2017) the portfolio consists of 2,464 loans (in 3,191 parts) secured on 2,520 properties. The average current loan balance is Eur220,130. Full Original Property Valuation: 89.7%. Self-certified borrowers account for 40.3% of the portfolio and 33.9% of the loans have been restructured. Repayment Type (by current balances): Capital & Interest 77.3%, Interest Only 22.7%. Rate type: variable 97.4%, fixed 2.6%. Occupancy Type: owner-occupied 86.4%, BTL 13.6%. The WA current LTV is 113.3% (original LTV was 71.1%) and the WA seasoning is 11.1 years. Regional concentration: Dublin 19.9%, Border 15.9%, Mid-East 15.5%, South East 15.0% and South West 12.0%.
Approximately 88.72% of the Mortgage Loans in the Provisional Mortgage Portfolio had been in arrears of three months or more (by total Current Balance) at some point during the two years prior to the Provisional Cut-Off Date, and approximately 92.55% of the Mortgage Loans in the Provisional Mortgage Portfolio had been in arrears of three months or more (by total Current Balance) at some point during the five years prior to the Provisional Cut-Off Date.
Significant investor: On the Closing Date, the Beneficial Title Seller (Mars Capital Ireland Holdings DAC) will acquire 100% of the Class E1 Notes, the Class E2 Notes, the Class E3 Notes, the Class P Notes and the Class F Notes. The Beneficial Title Seller may subscribe for Notes from time to time.
CRR 405: The Beneficial Title Seller (Mars Capital Ireland Holdings DAC) will undertake that it will retain at all times, until the redemption of the last of the Senior Notes and the Class P Notes, a material net economic interest of not less than 5% in the nominal value of the securitised exposures (representing downside risk and economic outlay) in accordance with the text of Article 405 of the CRR, Article 51 of the AIFMR and Article 254 of the Solvency II Delegated Act. As at the Closing Date, such interest will be comprised of an interest in the first loss tranche, and such holding will be achieved by holding a sufficient amount of the Class F Notes.
The Beneficial Title Seller does not intend to retain a risk retention interest contemplated by the U.S. Risk Retention Rules in connection with the transaction described in the Prospectus in reliance on the Foreign Safe Harbour. Consequently, the Notes may not be purchased by and will not be sold to any person except for persons that are not "U.S. persons" as defined in the U.S. Risk Retention Rules.
Compare/contrast; Grand Canal 1, Dilosk, European Residential Loan Securitization 2017-1