Mortgage News
Kensington parent to issue securitisation
Investec, the South African bank which owns Kensington, is on track to complete the first European securitisation of mortgage-backed securities since the wholesale markets effectively closed within a matter of days.
The securitisation is a relatively small deal, having been scaled back from £250m to £130m worth of its top-rated mortgage bonds.
It is understood that the size of the issue had to be reduced because Investec did not have sufficient collateral to support a larger deal, rather than lack of interest from investors.
Indeed, the very fact that a European securitisation is going ahead will be welcomed as a significant positive step by investors and bankers alike.
Most of the mortgages backing the bond are non-conforming, but have performed well to date and have been stress-tested for future performance.
Given the non-conforming nature of the mortgages and the complexities that potentially implies, the pricing of the deal, which it is understood could take place as early as tomorrow, may not be straightforward.
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