Credit Foncier de France (CFF) is marketing the first securitization of French residential mortgage since 2006, according to a presale report published by Moody’s Investors Service.
The deal, CFHL-1 2014, was announced last week but has yet to price.
Moody’s presale report did not indicate how the tranches in the capital structure would be sized. However the ratings agency said it expected to rate the class A and A2 notes, AAA’; the class B note Aa1’, the class C notes, A1’; the class D notes, Baa1’ and the class E notes, Ba1’. CFF may issue up to two additional series of class A2 notes after five years.
The underlying pool is comprised of 8,810 prime borrowers. All of the loans are fixed rated and none are in arrears.
The loans are either secured by a first ranking mortgage or a guarantee extended by Credit Logement. According to Moody’s,19.2% of the pool is made up of these guarantees that in France are used as an alternative to mortgages to finance housing at lower costs. The guarantee is only available to those with a good credit record and a stable income.
“These loans have historically performed better than the mortgage loans and they also benefit from the guarantee from Credit Logement,” the presale report states.
CFF was last in the market in 2008. The deal it is currently marketing has a substantially lower weighted average current loan-to-value ratio at 67.7%, compared with 77% for the 2008 deal.
The pool of loans backing the current transaction does not contain loans backed by buy-to-let properties, which accounted for close to 40% of the loans backing the previous transaction. There are also no interest-only loans, which represented around 9% of the portfolio in the previous transaction.
Credit Foncier is the lead arranger of its new deal. Credit Suisse, Natixis are co-arrangers on the deal and both banks teamed with Lloyds Bank, J.P. Morgan Securities and Royal Bank of Scotland to lead manage the deal.