The majority government-owned Permanent TSB will sell a portfolio of mostly buy-to-let mortgages in a so-called securitization deal involving nearly 5,000 borrowers, as well as US bond investor Pimco and debt service Pepper.
Typically, only 6 percent of mortgages are classified as non-performing. The portfolio generated gross interest income of €14 million and an operating profit of €2 million last year.
The transaction involves the sale of a pool of 5,170 leased credit accounts secured on 6,195 properties. The loan accounts are linked to so-called 4,915 loan relationships – which can have a single or joint debtor.
The bank said the portfolio had a gross balance sheet value of around €770 million, a net book value of €700 million and an overall risk-weight intensity of around 65 percent. About 86 percent of the loans are on a tracker, 12 percent are on a variable product and remain on a fixed income product.
The transaction will be funded as a securitization through a vehicle called the Glenbeigh 4 Seller DAC, to be funded by funds managed by Pacific Investment Management Company (PIMCO) and arranged by Citibank.
PTSB will use the €700 million raised for general corporate purposes including the completion of the Ulster Bank transaction.
Customers whose loans are included in this transaction will continue to enjoy the same post-sale regulatory protections under the Consumer Protection Code (CPC) and the Code of Conduct on Mortgage Arrears (CCMA).
The loans will continue to be serviced by PTSB for a period of up to six months and then transferred to Pepper Finance Corporation.
For PTSB, the deal will increase its capital ratios and bring in additional cash up front.
https://www.independent.ie/business/irish/ptsb-to-offload-5000-buy-to-let-home-loans-42007536.html PTSB issues 5,000 home loans