Polaris 2020-1 PLC: 07 August 2020
A stand-alone transaction, 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 from Pepper Money Limited (the Seller) and secured over residential properties located in England and Wales, which will be purchased by the Issuer on the Issue Date. Substitution of the loans contained in the Mortgage Pool may occur in accordance with the terms described in the prospectus (available on www.euroabs.com).
The Seller is a wholly owned subsidiary of Pepper Money (PMB) Limited and is regulated by the FCA. The Seller will acquire the beneficial interest in the mortgage loans originated by Pepper (UK) Limited from Cayenne Funding Limited and Naga Funding Limited before transferring the beneficial interest in the mortgage loans to the Issuer pursuant to the Mortgage Sale Agreement. Certain of the loans in the mortgage pool were originated prior to the incorporation of PML, but have subsequently been sold to PML pursuant to various mortgage sale agreements.
The provisional portfolio (as of 30 June 2020) consists of 1,953 loans, where the average principal balance is £180,619 and the largest loan is for £994,194. All loans were subject to a full internal and external inspection. Loan purpose (by current balances): purchase – 45.31%, re-mortgage – 54.69%. Occupancy Type: owner occupied – 74.63%, BTL – 25.16%. Repayment Method: repayment – 69.21% and interest only – 30.79%. Interest Rate Type: fixed to floating – 99.93%, floating for life – 0.07%. The WA CLTV is 70.15% (original LTV was 70.62%) and WA seasoning is 8.14 months. Regional concentration: South East – 29.38%, Greater London – 24.77%, the South West – 9.84% and the North West – 8.13%. Additional information: Self-employed – 33.78%, CCJs – 25.02%; Bankruptcy/IVA – 0.00%.
EU Risk Retention: The Seller (the Risk Retention Holder) will undertake to retain, on an ongoing basis as an originator within the meaning of Regulation (EU) 2017/2402, a material net economic interest of not less than 5% in the securitisation as required by Article 6 of the Securitisation Regulation. In order to satisfy the EU Retention Requirement on the Issue Date the Risk Retention Holder will, in accordance with Article 6(3)(a) of the Securitisation Regulation, acquire and hold on an ongoing basis not less than 5% of the outstanding nominal value of each of the tranches of Notes (except for the X Notes) sold or transferred to investors so as to hold exposure to the Retained Interest at not less than the EU Retention Requirement.
US Risk Retention: The Seller 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, as amended, but rather intends to rely on an exemption provided for in Section 20 of the U.S. Risk Retention Rules regarding non-U.S. transactions.
Compare/contrast: Polaris 2019-1, Avon Finance No.1 plc, Elvet Mortgages 2020-1