Tower Bridge Funding 2020-1: 21 July 2020
This will be the fifth public securitisation from Belmont Green and, as per the earlier transactions, the issuer will make payments on the notes from payments of principal and revenue received from a portfolio comprising mortgage loans originated by BGFL, under its trading name Vida Homeloans, secured over residential properties located in England, Wales and Scotland.
Eligibility criteria (includes): each loan must be secured by a first ranking legal mortgage (a “Mortgage” over a freehold or leasehold residential property) in England or Wales; loans will be granted on residential property offered as acceptable security in England and Wales subject to acceptable valuation; use of all properties will be for residential purposes as a private dwelling only; minimum property valuation for Owner Occupied Properties is £70,000 for all property types, £125,000 for ex local authority flats/maisonettes outside of Greater London and £200,000 for ex local authority flats/maisonettes within Greater London; minimum property valuation for Buy-To-Let Properties is £50,000 for all property types, £125,000 for ex local authority flats/maisonettes outside of Greater London and £200,000 for ex local authority flats/maisonettes within Greater London; unacceptable tenure includes: leasehold houses, flats and maisonettes with less than 40 years lease remaining from the date on which the loan was originated for repayment loans, or not less than 70 years lease remaining from the date on which the loan was originated for interest only loans.
For the full list of lending criteria, please see the relevant section in the final offering circular.
At the cut-off date (31 May 2020) the provisional pool consisted of 1,811 loans, where the current average balance is £192,782 and the largest loan is for £1.014mln. All were subject to a full internal and external inspection. Occupancy type (by current balances): BTL 77.52%, owner-occupied 22.48%. Repayment type (by current balances): interest-only 75.86%, repayment 24.14%. Interest Rate type: fixed to floating 99.81%, floating (for life) 0.19%. Loan purpose: re-mortgage 60.61%, purchase 36.96%, right to buy 2.43%. The WA current LTV is 72.02% (original LTV 72.10%) and the WA seasoning is 5.79 months. Regional concentration: Greater London 41.23%, South East 14.84% and East of England 11.98%. Additional information: self-employed account for 38.76% of balances; CCJs account for 9.84% of balances.
EU Risk Retention: BGFL will, as originator for the purposes of the Securitisation Regulation, retain on an ongoing basis a material net economic interest of not less than 5% in the securitisation as required by Article 6(1) of the Securitisation Regulation. As at the Issue Date, such interest will be satisfied by BGFL holding the first loss tranche, in this case a 100% interest in the Z1 Notes and the Z2 Notes, in accordance with Article 6(3)(d) of the Securitisation Regulation.
U.S. Risk Retention Rules: BGFL, 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 certain foreign-related transactions.
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 become a “covered fund” as defined in the regulations adopted under Section 13 of the Bank Holding Company Act of 1956, commonly known as the “Volcker Rule”.
STS: As at the closing date, no notification will be submitted to ESMA in accordance with Article 27.
Compare/contrast: Tower Bridge Funding No.4, Finsbury Square 2020-2 plc, Brass RMBS No 9 plc