RMBS

Specialist buy-to-let mortgage provider LendInvest has announced Mortimer BTL 2021-1, a £280m UK RMBS backed entirely by interest only BTL mortgage loans. The issuer has grown the senior mezzanine tranches to reflect increased investor demand for senior mezzanine notes.

In mid-May GlobalCapital convened representatives of three RMBS issuers with different business models and approaches for a wide-ranging discussion about the state of the UK mortgage markets, funding strategies, and much more. Kensington is the most frequent issuer in European RMBS, with a track record stretching back to 1995, and more than £10bn of assets under management, including about £6bn of servicing mandates. LendInvest and Habito are fintech lenders, with LendInvest originating bridging loans and buy-to-let, funded through securitizations (LendInvest has completed two public deals so far), retail bonds, funds, and private capital, including a £500m partnership with JP Morgan. Habito mixes technology-enabled mortgage broking with its own buy-to-let originations, funded through Citi’s securitization shelf, and has recently launched the first long-term (up to 40 years) fixed rate mortgage product in the UK, funded through a partnership with CarVal Investors.

European ABS has experienced a historic rally in recent months as spreads have tightened in response to a wider economic recovery. But as pent-up supply begins to return to the market, syndicate desks see a widening out of spreads as new issuance increased throughout June and July.

Banks working on Harmony French Home Loans FCT 2021-1, the latest RMBS transaction from Crédit Immobilier de France Développement (CIFD), released price talk for the deal on Tuesday.

Greek banks are in their rudest health since the aftermath of the global financial crisis and are calling on capital markets investors to back them as they help the country rebuild its economy in the wake of Covid-19. With the banks able to access new sources of capital, propped up by the country's Hercules non-performing loan guarantee scheme, plenty of supply — and performance — could follow, report Tom Brown, Tyler Davies and Sam Kerr.

Davidson Kempner, through its investment vehicle Burlington Loan Management, is selling six tranches of a non-conforming UK RMBS, with Bank of America as sole arranger. A legacy portfolio of pre-financial-crisis mortgages is backing the deal.

Belgium-based Argenta Spaarbank is back in the Dutch RMBS market after a three year break, having last issued an RMBS transaction in 2019. The issuer is only selling the senior tranche, which has a minimum target pricing of €500m.

Greece has overtaken Italy as the biggest source of non-performing-loan ABS issuance in Europe, with banks stepping up issuance with a slew of transactions in 2021 as Italian institutions wind down their post-financial crisis backlog of bad debt.

As inflation indicators across the globe begin to point to a period of sustained growth, equity investors have fretted over where to put their money instead of tech stocks, whose valuations have reached gargantuan multiples. There is a compelling argument to be made for rotating into Greece, specifically its banks, which will have to finance a new wave of economic growth.