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Pepper Money completes £450m securitisation

  • 14/02/2022
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Pepper Money completes £450m securitisation
Pepper Money has closed a £450m residential mortgage backed securitisation (RMBS), its largest to date.


The securitisation, Polaris 2022-1, is a mix of first charge owner occupied and buy-to-let mortgage loans.

A quarter of the portfolio comes from customers with legacy country court judgments (CCJs), which Matthew Blake, treasurer at Pepper Money, said were a result of “historic events that our customers can demonstrate are in the past”.

Pepper Money said this securitisation also attracted new investors, despite the market being more volatile due to rising inflation and other geo-political concerns.

It added that it called the legacy Castell 2018-1 securitisation, which it said underlined its commitment to the RMBS market.

According to the lender, it has completed nine transactions and has nearly reached £3bn in the RMBS market across first and second charge mortgage loans.

It also expects to complete more securitisations during the year.

Additionally, the lender has secured a new funding facility with HSBC amid plans to grow its treasury team to support its “continued ambition”. Blake said HSBC would provide “additional diversification and capacity” to support its second charge proposition.

He said this current securitisation including loans with CCJs was part of its financial inclusion strategy as it “should not present an impediment to accessing a mortgage”.

Blake explained: “The strong performance of these mortgages is a testament to our robust underwriting and our ability to support our customers, this simultaneously provides opportunities for both our customers and our investors.”

Laurence Morey (pictured), chief executive at Pepper Money, said: “The Polaris 2022-1 securitisation is our largest deal to date and includes a number of new investors, demonstrating the quality of assets that we are able to generate at Pepper Money.

“It caps a great month in which we have launched Pepper branded second charge mortgages, continued to innovate with our use of automated valuations models (AVMs) and made a number of other proposition enhancements. It’s an exceptional start to, what promises to be, a very exciting year.”

Last year, Pepper Money completed two securitisations worth £629m, the first transaction consisting of £352m of specialist first charge residential and buy-to-let mortgages originated by Pepper Money.

The second transaction was worth £266m of second charge mortgages originated by Optimum Credit.

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