Earlier this month Mortgage Solutions reported that the lender was preparing to launch its second securitisation before Christmas, after it re-entered the market in November last year with a £150m issuance.
The £200m securitisation will provide funds for new lending. The transaction, called Paragon Mortgages (No. 17) Plc, is made up of:
– £175m of AAA rated notes at a margin of 135 basis points over three-month Libor
– £10.5m of AA rated notes at 190bps over three-month Libor
– £10m of A rated notes at a margin of 290 basis points over three-month Libor
John Heron, Paragon Mortgages managing director, said it’s a significant accolade for Paragon to be able to put out a deal of this size and at this price.
“There are a number of key points here which are good news for brokers. The first is that this is a buy-to-let only securitisation and only the second launched since the credit crunch. This has to be good for intermediaries, specialist lenders and landlords too.
“The pricing indicates better liquidity in the market and the positivity of buy-to-let as an asset class,” he added.
Rob Ford, a portfolio manager with Twenty Four Asset Management, said: “From Paragon’s point of view it’s an excellent result – they achieved an extremely tight cost of funding. From an investors’ point of view, I think there is probably better value available elsewhere in the secondary market – Paragon pretty much squeezed the last basis point out of it.”
The lender intends to announce its full-year results on Tuesday 20 November 2012.
