The transaction, originated by Optimum Credit, is the firm’s largest second charge issuance to date.
The securitisation, which the firm said received strong demand, is the lender’s fifth issuance in its secured loan series of transactions called the Castell programme.
Pepper bought Optimum Credit in 2018 from Patron Capital. At the time of purchase, the Cardiff-based second charge firm had a loan book valued at more than £450m.
Pepper is anticipating a rise in demand for second charge borrowing next year. The lender said this year’s second charge business was dominated by borrowers who wanted to consolidate their debts, a trend that is expected to increase if interest rates rise making short-term unsecured borrowing more expensive.
Laurence Morey (pictured), chief executive at Pepper Money, said: “The demand for this securitisation reflects the strength of the underlying loan book and the quality assets we are able to generate through our second charge platform. We expect customer demand for second charge mortgages to grow next year as we continue to develop our product range to meet the changing needs of our customers.”
Treasurer Matthew Blake added: “We received strong investor appetite for the securitisation which was executed as part of a refinancing of the funding platform during 2021. We will seek further funding diversification during 2022.”