The pricing and size of the pool are not yet known but Fitch Ratings has assigned the bond, Paragon Mortgages No. 20, a provisional AAA rating.
The bond will be made up of 98.9% of loans originated by Paragon Mortgages and 1.1% of mortgages acquitted by Idem Capital Securities, a subsidiary owned by Paragon Group.
In the note from Fitch, it said it had applied a stricter stress calculation to the buy-to-let portfolio than it would a prime owner-occupier portfolio even though Paragon’s mortgages have experienced historically lower arrears than other deals.
Fitch has factored in a the probability of a higher default rate from Idem loans because they were made at the peak of the market in 2007 from a specialist originator.
The final rating is subject to the receipt of documents backing up information already received.
The Paragon Group of companies completed its last securitisation worth £350m consisting of buy-to-let and other residential mortgages in March.