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Paragon poised to launch further securitisation

by: Samantha Partington
  • 01/07/2014
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Paragon poised to launch further securitisation
Paragon is set to launch a further securitisation of UK prime buy-to-let loans, according to information from a ratings agency on the forthcoming transaction.

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.

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