West Bromwich Building Society is planning the first investor-placed prime U.K. residential mortgage securitization of the year— a £380 million ($579 million) senior tranche from the deal Kenrick No. 2.
Moody’s Investors Service has assigned preliminary ratings of 'Aaa' to the class A floating rate notes due 2049. The deal also has class B floating rate notes due 2049 that are unrated by Moody's.
The notes are backed by a pool of prime owner-occupied U.K. residential mortgage loans originated by West Bromwich Building Society. The deal is the third securitization of mortgages originated by West Bromwich and the second since the financial crisis, following Kenrich No. 1 in 2012, according to Moody's. At closing the total credit enhancement for the class A notes will be 12.40%.
As with Kenrich No. 1, and contrary to most U.K. RMBS, there is no equitable assignment of mortgages. Instead, the deal has an originator trust structure, whereby mortgages are ring-fenced in favor of the issuer and West Bromwich.
The absence of U.K. prime RMBS issuance has held back overall securitization volumes in Europe this year. The
The scheme was originally set to terminate in Feb 2014, but the BofE recently announced it would be extended by one year to January 2015.