Swedish Subprime Hits Europe's RMBS Primary

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Bluestep Finans AB and Blustep Bostadslan AB  are working on a Swedish Krona denominated non-conforming  RMBS issuance called Bluestep Mortgage Securities No.2.

The transaction is a securitization of a pool of Swedish loans secured on “Pantbrevs”, which are the registerd charges over single-family houses in Sweden; and “Bostadsratts”, which are the pledges over the interest in a housing co-operative.

The total portfolio size is SEK 3 billion ($457 million).

Standard & Poor’s has assigned preliminary ratings of ‘AAA’ to the class A notes. The structure will also issue unrated class Z notes.  The issuer will place the senior tranche while retaining the junior tranche. This structure provides strong protection to the class A notes, said S&P in the presale report,.

The roadshow will start on Sept. 17 and the issuer may consider issuing €-denominated tranches based on reverse inquiries.

The originators, Blustep Bostadslan AB and Bluestep Financs AB are Stockholm-based mortgage lending companies that specialize in the origination of Swedish residential mortgage loans to nonconforming borrowers, according to the S&P presale report.

“Bluestep Finans is considered to be the forst nonconforming lender in Sweden that originates loans to self-certified borrowers and borrowers with missed payement or certain obligation,” expalined S&P.

Of the provision pool, 38.9% of borrowers have self-certified their incomes and 60.84% have negative credit payment remarks registered with the Swedish Credit Bureau (Upplysningscentraleb AB) and 53.2% have an LTV greater than 80%.

Barclays and Natixis are lead managers on the deal.




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