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Precise Mortgage Funding 2018-2B: 21 March 2018

Charter Court returns to the market with their tenth RMBS transaction (nine under the Precise name, one under Charter Mortgage Funding. All documentation, investor reports and LLD available via EuroABS), which is another stand-alone BTL RMBS deal, and similar to the earlier 18-1B transaction.

CCFS is both an originator and servicer of residential mortgage loans in the United Kingdom and is 100% owned by Charter Court Financial Services Group Limited, a private limited company established on 1 October 2008. It trades as Precise Mortgages in the UK market.

At the cut-off date (28 February 2018), the provisional portfolio consists of 2,802 buy-to-let mortgage loans acquired by the seller between August 2014 and January 2018 and secured over properties located in England and Wales. The average account balance is £142,441, the largest is £1.307mln and there are just 28 loans of £600,000 or greater in the pool (accounting for 5.62% of current balances).

Pool characteristics (by current balances): Self-employed borrowers account for 53.66% of the pool and first time buyers for just 0.04%. Loan purpose: Refinancing 54.11%, Home purchase 45.89%. Product type (by current balance): Fixed Rate Loan reverting to LIBOR 66.55%, Floating linked to LIBOR 33.45%. Redemption type: Interest-only 89.46%, Re-payment Loans 10.54%. The WA current LTV is 71.04% (original LTV was 71.11%) and the WA seasoning is 10.06mnths. Regional concentration (by current balance): South East including London 31.93%, South West 13.40%, West Midlands 13.14% and the North West 11.82%.

CRR/405: On the Closing Date the seller will, as an originator for the purposes of the CRR and the AIFM Regulation, retain a material net economic interest of not less than 5.0% in the securitisation in accordance with the text of Article 405 of Regulation (EU) No 575/2013. Such interest will comprise retention of randomly selected exposures equivalent to no less than 5% of the nominal value of the securitised exposures.

The Seller, as the sponsor under the U.S. Risk Retention Rules, does not intend to retain at least 5% of the credit risk of the securitised assets for purposes of compliance with the final rules promulgated under Section 15G of the Securities Exchange Act of 1934, but rather intends to rely on an exemption provided for in Section 20 of the U.S. Risk Retention Rules regarding non US transactions.

Compare/contrast: Precise Mortgage Funding 2018-1B, Charter Mortgage Funding 2017-1, London Wall Mortgage Capital (Fleet 2018-1)