Cavern Funding 2020 PLC: 15 October 2020
A stand-alone transaction, where the Issuer will make payments on the Notes from a portfolio comprising the Purchased Receivables and their Ancillary Rights under or in connection with Hire Purchase Contracts (including PCP Contracts) originated by MI Vehicle Finance and purchased by the Issuer from the Seller on the Closing Date, and during the Revolving Period after the Closing Date.
MI Vehicle Finance Limited (formerly “Aarco 264 Limited” and latterly “Quantum Funding Limited”) is a subsidiary of Investec Asset Finance plc and is part of the Investec Asset Finance Group, having been acquired by IAF in 2014. MIVF’s motor finance business was established in 1991 and operates through three offices across the United Kingdom, which service a network of approximately 1,000 motor dealers in the United Kingdom. As at 31 March 2019 MIVF had a loan book of over £197mln, comprising a range of credit products for retail and commercial customers including, inter alia, hire purchase contracts, lease purchase contracts and personal contract purchase contracts.
At the initial cut-off date the portfolio comprised of 31,248 contracts, where the Average Principal Balance was £11,039 and the largest is £227,473. Product type (by current balances): HP – 56.68%, PCP – 37.22%, Lease Purchase – 6.10%. Client type (by current balance): Private Individual – 81.24%, LLP – 15.97%, others – 2.80%. The original LTV was 85.59% and the WA seasoning is 12.44 months. Geographic distribution: North West – 13.93%, South East - 13.33%, Scotland – 9.90% and the West Midlands – 9.64%.
EU Risk Retention: On the Closing Date the Seller, in its capacity as an originator, will retain (either directly or through a wholly owned subsidiary or subsidiaries) on an ongoing basis until redemption in full of all of the Notes a material net economic interest of not less than 5% in the nominal value of the securitisation, in accordance with the text of Article 6 of the Securitisation Regulation. As at the Closing Date, such interest will comprise an interest in a sufficient amount of the Class B Notes and the Class C Notes that comprises a material net economic interest of not less than 5% in the nominal value of the securitisation.
US Risk Retention: The Seller, as the sponsor under the US Risk Retention Rules, does not intend to retain at least 5% of the credit risk of the securitised assets for the 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 US Risk Retention Rules regarding non-US transactions.
Compare/contrast: Azure Finance No.2 plc, Bavarian Sky UK 3 plc, Orbita Funding 2020-1 plc