Allied Irish Bank (AIB) has signed HML to offer the U.K.’s first 48 hour "hot’"standby servicing arrangement for the issuer's £437.6 million ($683 million) securitization of U.K. mortgage assets.

The 48-hour back-up agreement was created to give investors further assurance over the servicing of the assets, allowing AIB to issue the  first successful unguaranteed securitization from an Irish institution since 2009, according to a statement released by the servicer.  

The deal varies from traditional standby arrangements, which are typically designed to deal with invocation periods of 60 to 90 days. It follows an industry trend of appointing third parties on standby agreements when issuing securitizations.

A full boarding of the portfolio to HML’s platform has taken place up to the stage where HML could take over servicing responsibility at just 48 hours notice. This includes a full service specification, collections policy and letter suite. HML will receive daily feeds of the portfolio data which will be reconciled on a regular basis to allow HML to execute the arrangement at any point

Steve Rogers, HML’s director of securitization services, said the RMBS support is just one part of a threefold approach HML offers lenders looking to improve their cash position.

“As well as helping lenders securitise to raise funds, HML can help institutions to delever assets quickly," he said. "We completed a deal last year with an Irish lender that saw over £1 billion of assets migrated to HML in just four months, to allow a whole loan sale to go through on time.

He added that they are "also able to provide analytics-led arrears management services to improve the performance of portfolios, increase cash collected and reduce provisioning for lenders in Ireland and the U.K.”


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