PCL Funding IV Plc (Series 2020-1): 09 October 2020
This will be another standalone transaction where the Issuer’s primary source of funds to make payments on the Notes will be the payments it receives from the collections received in respect of a portfolio of advances made by Premium Credit Limited to fund insurance premia and other payment plan receivables which will be purchased by the Asset Trustee on an ongoing basis.
PCL is one of the largest independent providers of insurance premium finance loans in the Relevant Jurisdictions having a market share, based on market information, of between 40% and 50%. PCL provides loans to borrowers which they use to pay annual insurance premiums and service fees such as school, professional membership, sports and leisure fees.
PCL’s income derives from a combination of interest income on the amounts they advance and fees receivable for the services provided. For the year ended 31 December 2019, PCL generated income of £108.1 million and operating profit before tax of £36.1 million.
PCL has been securitising receivables since 31 October 2012 when a standalone (and privately funded) facility was established.
The portfolio consists of 1,620,355 receivables, where the average principal balance is £643. Product type (by number of receivables & % balances): C&C 126,736 – 57.65%, PL&S 1,398,706 – 34.78%, DDMS 94,768 – 7.53% and SFP 145 – 0.04%. Customer type (by number of receivables & % balances): Corporate 127,815 – 60.63%, Retail 1,492,540 – 39.37%. Obligor concentration: Top 1 – 0.44%, Top 5 – 1.34%, Top 10 – 2.12%. Country concentration: UK – 94.24%, Ireland – 4.55%. The WA seasoning is 4.49 months.
EU Risk Retention: Premium Credit Limited (the Seller), as “originator” as defined in Article 2(3) of the Securitisation Regulation, will, for the life of the transaction, retain a material net economic interest of not less than 5% in the securitisation in accordance with Article 6(1) of Regulation (EU) No. 2017/2402. As at the Series 2020-1 Closing Date, such interest will take the form of a first loss tranche comprising the Class D Notes, having a Principal Amount Outstanding of not less than 5% of the Aggregate Receivable Principal Balance.
US Risk Retention: The Seller intends to rely on an exemption provided for in Section __.20 of the U.S. Risk Retention Rules regarding non-U.S. transactions that meet certain requirements.
STS: The Series 2020-1 Notes are not intended to be designated as STS securitisation for the purposes of the Securitisation Regulation.
Compare/contrast: PCL Funding III plc (Series 2017-2), Orbita Funding 2020-1 plc, Towd Point Mortgage Funding 2019 - Granite 5 plc