Paragon Mortgage plans to issue £100 million ($154 million) worth of bonds backed by U.K. buy-to-let mortgages, according to Moody's Investors Service.

Buy-to-let mortgages finance homes purchased with the intent to rent, as opposed to owner-occupied mortgages.

Paragon Mortgages (No. 24) is collateralized by a £287 million pool of mostly fixed-rate loans with remaining terms of 21.21 years and two years of seasoning. They are underwritten with a weighted average loan-to-value ratio of 72.6%. None of the loans are delinquent.

The structure allows for additional loans to be added to the pool until June 30, 2016.

Moody's plans to rate the class A notes at 'Aaa', The senior class is split into two tranches, one denominated in Euros and another in sterling; both mature on July 2043 and benefit from 17% credit support.

 At the subordinate level, the trust will offer 'Aa2' rated class B notes that benefit from 11.5% credit enhancement and 'A1' rated class C notes that benefit from 5% credit enhancement. The juniors bond will be issued in sterling and mature on July 2043.

Bank of America Merrill Lynch, Lloyds Bank, Macquarie Bank, Morgan Stanley and Natixis are the lead managers.

Moody's said in an Oct. 15 report that 2015 is currently on track in becoming the best year for buy to let mortgage deal issuance since the credit crunch. The rating agency said that product currently makes up 15% to 16% of mortgage lending in the U.K.

The rise in demand for the product is on the back of an increased need for rental housing as U.K. first time homebuyers struggle to get onto the property ladder.

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