Caixabank to Issue €1.2B Consumer Loan, Mortgage Bonds

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Bond rating agency DBRS has assigned provisional ratings to bonds backed by €1.2 billion of consumer loans and mortgages originated by Spanish bank Caixabank.

Caixabank Consum 2 FT will issu 1.17 billion in Series A notes, with an ‘A (low)’ structured finance rating from DBRS, and €130 million in Series B notes (rated ‘BB’).

The Series A notes benefit from the Series B notes’ subordination and a €52 million reserve fund.

The transaction is a static securitization, with no further unsecured consumer loans and mortgage consumer loans to be added to the pool. The unsecured mortgage loans include both standard loans and drawdowns on revolving mortgage credit lines; the mortgage consumer loans are secured by first- and second-lien mortgages on housing properties, all of which are located in Spain.

The mortgage loans take up 25% of the portfolio balance. They have a 71.1% weighted average current loan-to-value and a weighted average seasoning of 6.3 years. DBRS reports 21% of the portfolio loans were issued to self-employed borrowers, and 23.9% of the mortgages have remaining terms exceeding 20 years.

The weighted average margin of the assets of 1.5%, “considerably high” for mortgage loans, DBRS stated.

The unsecured loans, making up the remaining 75%, are mostly fixed-rate loans (86.8% of the portfolio) that have been seasoned 1.3 years, with remaining terms averaging four years. The loans carry a weighted average coupon of 9.6% for fixed-rate, and 3.8% on the floating rate contracts (linked to the 12-month Euribor rate).

The Series A and B notes are priced according to the three-month Euribor rate.   

Caixabank will remain the servicer of the loans, and is also financing the initial expenses and the reserve fund for the securitization (which in Spain takes place in the form of a fund, as required by that country’s securitization law).

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