Together Asset Backed Securitisation 2018-1: 10 November 2018
A standalone issuance and the second public securitisation from originator The Together Group, 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 originated by the sellers and secured over residential properties located in England, Wales and Scotland and sold by the sellers to the issuer on the closing date.
TPFL, TCFL and Blemain are wholly owned subsidiaries of TFSL. The Together Group is a specialist UK mortgage loan provider, having been established in 1974. The Group specialises in offering individually underwritten loans to segments of the markets that are underserved. Some of the Together Group's customers automatically fall outside the formulaic and automated scorecard assessment methodologies used by other lenders based upon probabilities and averages as a result of, for example, being self-employed or a freelancer, having some form of credit profile event, having seasonal income or where the loan maturity extends beyond the borrower’s 65th birthday. The profit before tax of the consolidated Together Group was £94.1m for the financial year ending 30 June 2017. Loans and advances to customers by the consolidated Together Group were £2,240.9m for the financial year ending on 30 June 2017.
As at the Portfolio Reference Date (24 July 2018), the Provisional Portfolio comprised 4,093 variable rate mortgage loans with an aggregate Principal Balance of £304,580,356, originated by the sellers between January 2015 and July 2018. The average current principal balance is £74,415 and the largest loan is for £1.350mln. Mortgage legal charge (by current balances): Second legal mortgage/ second ranking standard security – 55.9%, First legal mortgage / first ranking standard security – 44.1%. Mortgage type: repayment – 58.6%, interest only – 41.4%. Customer type: owner occupied – 84.5%, BTL 15.5%. Additionally, Self-employed borrowers account for 53.6% of current balances and only 86.2% (by current balances) were subject to a full property valuation. The WA current LTV is 55.1% (original LTV 55.5%) and the WA seasoning is 10.5 months. Regional concentration: South East, London and South Central – 65.4%, North West – 5.7% and the South West – 5.7%.
Significant Investor: On the Closing Date, (a) TFSL will purchase 100% of the Class R Notes and (b) the Sellers will, collectively, purchase 100% of the Class Z Notes.
CRR 405: On the Closing Date, the Sellers will, as originators for the purposes of the CRR, the AIFM Regulation and the Solvency II Regulation, retain on an ongoing basis 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. As at the Closing Date, such interest will be comprised of each Seller retaining an interest in the Class Z Notes in proportion to the total securitised exposures for which each Seller is the originator.
The Sellers, as sponsors under the U.S. Risk Retention Rules, do 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 intend to rely on an exemption provided for in Section 20 of the U.S. Risk Retention Rules regarding non-U.S. transactions.
The 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: Together Asset Backed Securitisation 1, Finsbury Square 2018-2 plc, Oak No. 2 plc