Paragon ponders call certainty as return prepped
Paragon’s expected return to securitisation this quarter will need innovative structuring to address extension risk, market participants judge. While collateral in the UK buy-to-let player’s legacy deals has performed well, with best-in-class delinquencies and repossessions (ahead of some UK prime), Paragon could not call the deals during the crisis.
"People dont hold it against them," said one investor. "Everyone knows they wanted to call, but the money just wasnt there in the crisis."
Since it has no balance sheet, a put option offers little value. "All you get with a put option is a possible Paragon bankruptcy," said
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