Vermilion Trust No.1 (2019-1): 08 September 2019
Columbus Capital priced Vermilion 2019-1, its inaugural 100% non-resident securitisation of $250 million. A first to market globally, it represents new innovation in the structured finance market.
“The transaction enhances a diverse funding base for the business and allows for third parties to access innovative product solutions in a lending market that has been challenging in recent times” states CEO of Columbus Capital, Andrew Chepul. “As a wholesale funder, Columbus is required to provide market innovation which in turn assists with borrower solutions. The transaction will benefit our distribution platform and accommodate demand from the market as a whole”.
The company was focussed on originating loans in this category which were “securitisation friendly” and conforming to the market. Key features are limited interest only options and low LVR (Loan to Value) lending with a current cap of 70%. “With the banks withdrawing from the market in this borrower category, it is pleasing that Columbus has been able to provide a solution to borrowers while keeping the credit risk to bond investors at a low”. The introduction of Vermilion as a new funding vehicle (specifically focussed on Non Resident borrowers) strengthens the business’s position. The Vermilion bond issue is part of a new programme for Columbus, with the well-established Triton programme running in parallel, specifically focussed on prime resident borrowers.