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Oak No. 2 Plc: 05 October 2018

The second in the Oak series of RMBS deals, where the Issuer will make payments on the notes from payments of principal and revenue received from a portfolio comprising mortgage loans originated by Aldermore Bank plc and secured over residential properties located in England and Wales which will be purchased by the issuer on the closing date.

Aldermore was established in May 2009 through the acquisition of Ruffler Bank plc, a specialist bank offering straightforward products to its customers. As at 30 June 2018, loans to customers stood at £9.0bn, customer deposits totalled £7.8bn and the CET1 capital ratio was 12.3%. Aldermore generated an underlying profit before tax for 18 months to 30 June 2018 of £232m and an underlying return on equity of 17.2%. In March 2018 Aldermore became part of the FirstRand Group, one of South Africa’s largest financial services institutions.

The provisional portfolio will consist of 2,535 loans originated by the seller between June 2016 and April 2018 and secured over properties located in England and Wales. The current average loan size is £153,921 and the largest outstanding loan is for £951,029. Use of Proceeds (by current balances): Purchase – 66.87%, re-mortgage 33.13%. Repayment Terms: Repayment – 91.69%, Interest Only – 8.31%. Product Types: Fixed rate loan with compulsory future switch to floating – 97.39%, Floating – 2.44%, Discount – 0.17%. The WA current LTV is 74.03% (original 75.67%) and the WA seasoning is 11.69 months. Regional concentration (by current balances): South East – 20.49%, North West – 14.02%, East Anglia – 12.20%, Greater London – 10.48% and the West Midlands – 9.38%.

EU Risk Retention: Aldermore will undertake that it will retain a material net economic interest of at least 5.0%. in accordance with each of Article 405 of Regulation (EU) No.575/2013 and Article 51 of Regulation (EU) No 231/2013. As at the closing date, such interest will be comprised of an interest in the first loss tranche, in this case the Class Z VFN, as required by Article 405 of the CRR and Article 51 of the AIFMR.

Please note: Aldermore will, on the Closing Date, purchase 100.0% of the issued amount of the Class Z VFN.

Compare/contrast: Oak No.1, Gemgarto 2018-1 plc, Gosforth Funding Plc 2018-1