A pool of £3.4 billion in older, nonconforming and buy-to-let homes originated primarily by UK affiliates of GE Money has been priced for an August closing.

Hawksmoor Mortgages 2016-1 PLC is a collection of U.K. mortgage loans issued by several lenders and sold/serviced to a Luxembourg company owned by European private equity funds. More than 80% were originated by GE Money’s home lending and mortgage units, with about one-third consisting of aged, pre-crisis loans issued in 2007, according to a presale report from Standard & Poor’s.

S&P and Moody's Investors Service have each rated the Class A notes series in the British pound-sterling pool with a preliminary triple-A structured finance rating, representing 78.5% of the collateral pool size with 22.54% available credit enhancement support. The notes are priced at three-month Libor plus 140 basis points, with a step up to 225 basis points over Libor in August 2019.

S&P also rated four classes of deferred notes representing 15% of the pool, with ratings ranging from ‘AA’ to ‘BBB-’. Moody's assigned a provisional ratings of 'Aa1' (Class B), 'A1' (Class C), 'Baa1' (Class D) and 'Baa2' (Class E). Those notes also have step up provisions that will double or nearly double their initial interest margins in two years.

The well-seasoned loans, which an average age of 115.49 months, have a weighted-average loan to value ratio of 82.53%. The loan sizes are between £1,000 and £1.23 million, with an average loan balance of £93,688.

S&P notes the portfolio has a better-than-average performance of other nonconforming UK RMBS deals. Total delinquencies have averaged 11.61% since 2010 with 90-plus day delinquencies averaging 2.09% in that time. But as a nonconforming RMBS, the pool includes a large portion (29.71%) of “self-certified” and undefined salary loans, and 13.04% of loans are to borrowers who have previously had at least one court judgment, and 2.39% involved in a bankruptcy.

Citibank Europe and HSBC Bank were the lead arrangers, Deutsche Bank’s London branch and Bank of America Merrill Lynch International serving as joint arrangers.

The loans are serviced Junglinster S.a.r.l., a Luxembourg company jointly owned by funds managed by  Blackstone Tactical Opportunities Advisors LLC, TPG Special Situation Partners LLC, and CarVal Investors GB LLPLLC.

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