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Precise Mortgage Funding 2020-1B: 26 January 2020

Charter Court returns to the market with their twelfth RMBS transaction (ten under the Precise name, two under Charter Mortgage Funding), which is another stand-alone BTL RMBS deal and is similar to the earlier 2019-1B 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. On 4 October 2019, CCFSG was acquired by OneSavings Bank plc.

At the cut-off date (31 October 2019), the provisional portfolio consists of 2,424 buy-to-let mortgage loans secured over properties located in England and Wales. The average account balance is £165,330, the largest is £1.016mln and there are 23 loans of £600,000 or greater in the pool (accounting for 4.11% of current balances).

Pool characteristics (by current balances): Self-employed borrowers account for 54.00% of the pool and first time buyers for just 0.81%. Loan purpose: Refinancing 55.68%, Home purchase 44.32%. Product type (by current balance): Fixed Rate Loan reverting to LIBOR 98.22%, others 1.78%. Redemption type: Interest-only 90.20%, Re-payment Loans 9.80%. The WA current LTV is 71.03% (original LTV was 71.07%) and the WA seasoning is 9.70mnths. Regional concentration (by current balance): South East including London 43.45%, the West Midlands 11.53% and the South West 10.21%.

Significant investor: CCFS may, on the Closing Date, purchase 100% of the Class A2 Notes. CCFS has no obligation to retain the Class A2 Notes on an ongoing basis.

EU Risk Retention: On the Closing Date, CCFS will retain a material net economic interest of not less than 5.0% in the securitisation as required by Article 6(1) of Regulation (EU) 2017/2402. Such interest will comprise retention of randomly selected exposures equivalent to no less than 5% of the nominal value of the securitised exposures.

US Risk Retention: 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 2019-1B, Canada Square Funding 2019-1, Towd Point Mortgage Funding 2019 - Vantage 2