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Stratton Mortgage Funding plc : 30 April 2018

A stand-alone transaction, where the Issuer will make payments on the notes from payments of principal and revenue received from a portfolio comprising mortgage loans and their related security sold on the Closing Date by Ertow Holdings III and secured over residential properties located in England, Wales, Northern Ireland and Scotland.

The seller, Ertow Holdings III, is a designated activity company limited by shares incorporated in Ireland. The Seller entered into a Profit Participating Loan Agreement with the Retention Holder pursuant to which the Retention Holder agreed to make a loan available to the Seller which the Seller is permitted to use to invest in certain financial assets, subject to the terms of such PPL.

As at the cut-off date (31 December 2017) the provisional pool consisted of 1,829 loans (1,828 borrowers), where the Average Outstanding Principal Balance per loan is £78,966 and the largest is for £500,000. Loan Purpose (by current balances): Re-mortgage – 65.61%, Purchase 34.39%. Property Occupancy: Owner-occupied – 94.89%, BTL – 5.11%. Income Verification: Self Certified – 73.36%, Verified – 26.64%. Repayment Type (by current balances): Interest Only – 76.08%, Capital and Interest – 22.71% and Part & Part – 1.21%. Current Loan Index: SVR – 85.15%, BBR – 14.85%. The WA CLTV is 67.94%, the WA indexed LTV is 50.58% (original LTV was 75.70%) and the WA seasoning is 13.02 years. Regional concentration: Greater London – 14.37%, North West – 13.86%, West Midlands – 10.25% and Yorks & Humber – 8.76%.

Additional information. Arrears Multiple: 3.00months >= 12.25%. CCJs 1>= 18.38%. Prior Bankruptcy or Individual Voluntary Arrangement: 2.06%.

Significant Investor: On the Closing Date, the Seller will purchase 100% of the Class A Notes, 100% of the Class B Notes, 100% of the Class C Notes, 100% of the Class D Notes, 100% of the Class X Notes, 100% of the Class Z1 Notes and 100% of the Class Z2 Notes.

CRR 405: On the Closing Date, Burlington Loan Management (the "Retention Holder") will, as an originator for the purposes of the CRR, the AIFM Regulation and the Solvency II Regulation retain a material net economic interest of not less than 5% in the securitisation in accordance with the text of each of Article 405 of Regulation (EU) No 575/2013, Article 51 of Regulation (EU) No 231/2013 and Article 254 of Regulation (EU) 2015/35. The Retention will be comprised by the Retention Holder holding through its interest and exposure in the profit participating loan an interest in the first loss tranche and other tranches having the same or a more severe risk profile than those transferred or sold to investors, represented in this case by the retention by the Seller of the Class Z Notes.

U.S. Risk Retention Rules: The Retention Holder, 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-U.S. transactions.

Volcker Rule: The Issuer is of the view that it is not now, and immediately after giving effect to the offering and sale of the Notes and the application of the proceeds thereof on the Closing Date will not be, a "covered fund" for purposes of regulations adopted under Section 13 of the Bank Holding Company Act of 1956.

Compare/contrast: A.L.B.A. 2015 -1 plc, Oncilla Mortgage Funding 2016-1, Tower Bridge Funding No.2