Finsbury Square 2020-1 Plc: 22 February 2020
Another transaction in the Finsbury Square series of standalone RMBS deals (this is the eighth), where the issuer will make payments on the notes and the certificates from payments of principal and revenue received from a portfolio comprising mortgage loans acquired by Koala Warehouse Ltd secured over residential properties located in England, Scotland and Wales, which will be purchased by the issuer on the issue date. The transaction features recent originations of both owner-occupied and BTL loans originated up to September 2019 and the residual origination of the Finsbury Square 2017-1 plc transaction.
The seller, Koala Warehouse Limited, is an indirect wholly-owned subsidiary of Kayl Holdco. KMC is a wholly owned subsidiary of The Northview Group Limited (formerly called Kensington Group Limited). NVG is a wholly owned subsidiary of Kayl Holdco. NVG has the same ultimate shareholders as the seller and Acenden.
As at the cut-off date (31 December 2019) the mortgage pool consisted of 3,035 loans, where the average balance is £163,863 and the largest loan is for £1.353mln. Mortgage originator (by current balances): KMC – 100.00%. Ownership Type (by current balances): Owner occupied – 70.71%, Non-Owner/BTL – 29.29%. Repayment Method (by current balances): Repayment – 67.37%, Interest only – 30.55% and Part & Part – 2.08%. Rate Type: Fixed to Floating – 77.55%, Floating – 22.45%. Interest Product Type: 3 month Libor – 100.00%. Loan Purpose: Purchase – 60.32%, Re-mortgage – 31.92% and Debt consolidation – 7.76%. Additionally, self-employed account for 50.36% of the pool and there are no self-certified mortgages in the pool. The WA current LTV is 71.25% (original LTV was 74.67%) and the WA seasoning is 1.29 years. Regional concentration: London – 18.23%, South East – 15.90%, the East of England – 12.82% and the North West – 11.58%.
Significant investor: On the Issue Date, Kayl Holdco will hold the entire Principal Amount Outstanding of the E Notes and the Z Notes.
EU Risk Retention: Kayl Holdco will undertake that it will retain on an ongoing basis as an originator within the meaning of the Securitisation Regulation a material net economic interest of at least 5% in the securitisation, as required by the EU Retention Requirements. On the Issue Date, Kayl Holdco will, in accordance with Article 6(3)(d) of the Securitisation Regulation, hold exposure to the E Notes and the Z Notes in an amount such that the total nominal value of exposure to the E Notes and the Z Notes held by it is at least equal to 5% of the nominal value of the Mortgage Pool.
US Risk Retention: Kayl Holdco as a "sponsor" for the purposes of the U.S. Risk Retention Rules is required under the U.S. Risk Retention Rules to acquire and retain (either directly or through one or more majority-owned affiliates) at least 5% of the credit risk of the securitised assets of the Issuer. Kayl Holdco intends to comply by acquiring on the Issue Date and retaining an eligible horizontal residual interest equal to at least 5% of the fair value of the Notes and Certificates.
Volcker Rule: The issuer is of the view that it is not now, and immediately following the issuance of the notes and the application of the proceeds thereof it will not be, a "covered fund" as defined in the regulations adopted under Section 13 of the Bank Holding Company Act of 1956, as amended, commonly known as the "Volcker Rule".
Compare/contrast: Finsbury Square 2017-1, Silk Road Finance No. 6 plc, Towd Point Mortgage Funding 2020 - Auburn 14