Redstone Mortgage, a wholly owned subsidiary of UniCredit Bank, is planning a £242.53 million ($407.5 million) securitization of U.K. non-conforming mortgages. UniCredit Bank is also the lead manager on the deal.
Beacon Homeloans Ltd. originated the loans between 2007 and 2009. Redstone Mortgages later purchased the loans. The preliminary pool as of March 31, 2014 had a balance of £242.5 million.
Standard & Poor’s has assigned preliminary ratings of AAA’ to the £208 million class A notes. The notes are structured with an optional call date of June 2019 and a legal final maturity of March 2048. A subordinate tranche sized at £33.9 million will not be rated by S&P.
The pool is made up of 38.73% of self-certified loans and 4.36% of loans granted to borrowers with previous county court judgments. A county court judgment is a court ordered notice indicating that a borrower must repay outstanding debt.
Of the pool's borrowers: 0.18% have previously either been declared bankrupt, or entered individual voluntary arrangements; 15.94% includes loans granted to first-time buyers and 65.54% comprises remortgage loans.
The portfolio's weighted-average original loan-to-value (LTV) ratio is 70.92% and its weighted-average current LTV ratio is 64.01%. S&P said in the presale report that these figures are lower than an archetypical U.K. mortgage loan pool.
None of the loans in the pool are delinquent for more than one month. However, almost 20% of the pool has previously been in arrears and 9% of the pool comprises loans that have previously been restructured.
According to S&P, the deal will be the first U.K. non-conforming mortgage to price in 2014.