Silk Finance No. 5: 28 July 2020

As the title suggests this will be the fifth deal via the Silk Finance name, with the four previous transactions all having been redeemed.

The underlaying assets of the fund will be a portfolio of Portuguese leases, asset leases and long term rental contracts sold to it by the originator Banco Santander Consumer Portugal SA. Santander Consumer Portugal is the largest selective participant in the Portuguese car financing market focused on providing financial services to all participants along the car distribution chain, from the importer to the end customer, through its distribution network. In addition, Santander Consumer Portugal's origination capacity is strengthened by special agreements with SIVA (the importer of Volkswagen, Audi and Skoda), Mitsubishi, Seat, Kia, Isuzu and more recently Mazda, through a pan-European agreement entered into by Santander Consumer Finance.

As at the 1 July 2020 cut-off date, the portfolio consisted of 53,060 French amortisation loans and the loans have both fixed (91.12%) and variable rates (8.88%). Client type (by outstanding loan value): individual – 86.79%, company – 7.73%, self employed – 4.76%, and professional – 0.72%. Vehicle status (by outstanding loan value): new – 59.13%, used – 40.87%. The various loans are widely distributed throughout Portugal but, as per normal, with the greater concentration in Lisbon (19.22%), Porto (17.91%) and Setubal (13.15%).

EU Risk Retention: The Originator, which is an originator for the purposes of Article 4(1)(13) of the CRR, will undertake to retain, on an ongoing basis, a material net economic interest of not less than 5% of the nominal amount of the securitised exposures. Therefore, the Originator will retain the net economic interest in the securitisation through retention of the Class B Notes and, if necessary, other Notes having the same or a more severe risk profile than those sold to investors, equivalent to not less than 5% of the Receivables Portfolio, in accordance with Article 405 of the CRR, Article 51 of the AIFMR and Article 254(2) of the Solvency II Delegated Act.

Compare/contrast: Silk Finance No.4, Ulisses Finance No. 1