International Financing Review September 8 2018 45STRUCTURED FINANCE
Some issuers, not just the master trusts but
also lenders such as Virgin Money with its
standalone Gosforth programme, have the
option to sell dollars as well as – or instead of –
sterling.
In August, Santander UK chose to sell only
dollars off its Holmes platform and Virgin
Money is weighing up its currency options
after a US roadshow ended on Friday.
YBS doesn’t yet have the dollar option but
that looks likely to change.
“Issuing in dollars is on our horizon,” said
Chris Parrish, head of treasury at YBS. “We
have sizeable government refinancing due
in the future so will either issue more
frequently or in larger size, which naturally
leads us to look at multi-currency offerings.”
YBS’s drawings under both the Term
Funding Scheme and Funding for Lending
Scheme add up to €4bn.
Distribution statistics for Brass No.7 showed
asset managers bought 65% and bank treasuries
35%. UK accounts took 92% and other Europe 8%.LEAD ORDER RAISES TOWER BRIDGEBELMONT GREEN sold its largest RMBS yet,
issuing £500m through TOWER BRIDGE FUNDING
NO.3 PLC, with an £800m book bolstered by a
£250m lead order for the Class A tranche.
This was one of the larger order books for
a UK specialist lender this year and the
issuer was happy to get the deal away
without encountering too much congestion.
The structured pipeline is already looking
full and bankers say there is no sign that
deal flow is slowing.
As volume picked up after Barcelona, the
sterling structured finance market has
suffered from sharply wider spreads and
weak deal execution.
“We’ve seen deals widen out and still not
get any traction. So we tried to position thisdeal differently,” said David Basra, chief
financial officer, Belmont Green.
The £412.5m Class A tranche priced at
three-month Libor plus 120bp for a 2.69-year
WAL, in line with initial price thoughts.
“Belmont Green has a fairly aggressive
profile in terms of the collateral that they
target and in terms of putting out low-
seasoned pools,” said one investor.
But he said the seniors were well-structured at
under three years and with a two-times step-up.
“You’re not going break the seniors on
this and it’s going to be a relatively short
profile under almost all scenarios,” the
investor said.
Further to the sizeable lead order, the deal
included a £125m pre-funding feature.
Without pre-funding additional loans, the
pool was £375.5m, consisting of buy-to-let
(72.38%) and owner occupied (27.6%) loans.
“We wanted to get some certainty of
funds and this assured at least a minimum
deal size,” said Basra.
Bankers said it was not surprising that the
market was going back to pre-sounding
deals to de-risk execution given the
widening. It could also provide greater
certainty to marginal investors that the deal
was going to happen, with or without them.
“We’d have preferred the pricing [levels]
from the first half of the year but spreads are
where they are and you have to issue
throughout the business cycle,” Basra said.
And the pre-funding has freed up capacity
in Belmont’s warehouse lines.
Basra said the lead order was the result of
ongoing investor relations work from before
the summer.
“We also got in accounts that haven’t
shown their hand for a while in the ABS
market and new names to our programme.”
The joint leads were Barclays, JP Morgan
and NatWest Markets.As a new issuer that has yet to call a deal,
Belmont Green is still paying a premium
relative to established non-conforming
players.
“Over time it will gravitate towards the
longer-term players. You can’t expect that to
happen overnight, but with more of a track
record and reduced call certainty it will
happen,” Basra said.
With investors very focused on non-call
risk, Belmont is trying to address any such
fears by trying to diversify its liability base.
It outlined its plans for applying for a
banking licence.
The liquidity premium being applied to
the ABS market has not been matched by a
credit curve steepening. The B, C, D and E
notes priced at three-month Libor plus
180bp, plus 220bp, 260bp and 375bp.IRISH RMBS DUBLIN BAY ANNOUNCEDBARCLAYS announced a new Irish RMBS last
week to refinance part of a mortgage
portfolio sold by Lloyds in May.
The portfolio was bought for €4bn by a
consortium comprising Barclays, M&G and a
third, undisclosed party. After sale the
mortgages were transferred to a new
vehicle, Erimon Home Loans Ireland.
Barclays is sponsor for the new RMBS,
DUBLIN BAY SECURITIES 2018-1, which is backed by
€584m of mortgages. A roadshow runs from
Monday to Thursday and pricing is expected
next week. Barclays is arranger and is joint
lead with Lloyds. The deal is in Reg S/144A
format.VIRGIN MONEY FLIRTS WITH US FOR
GOSFORTH RMBSVIRGIN MONEY ended a four-day US roadshow
on Friday, following a UK roadshow theNEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 7/9/2018
Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type
Brass No 7 £300 2.96 3mL+60bp BAML/BNP Paribas/Lloyds NR/NR/NR RMBS
FNA 2018-M12 US$355.8 18 6.3 4 2. 469 Morgan Stanley NR/NR/NR CMBS
FNA 2018-M12 US$45,685 7 .34 3.54 6 Morgan Stanley NR/NR/NR CMBS
FNA 2018-M12 US$343.061 11. 75 3.6 39 Morgan Stanley NR/NR/NR CMBS
FREMF 2018-KF50 US$1,070.821 9 .50 1mL+40bp Wells Fargo/Barclays NR/NR/NR CMBS
FREMF 2018-KF50 US$29.745 9 .50 1mL+190bp Wells Fargo/Barclays NR/NR/NR CMBS
Starwood STWD 2018-URB US$88 2.6 4 1mL+95bp Wells Fargo Aaa/NR/NR CMBS
Starwood STWD 2018-URB US$18.300 2.6 4 1mL+130bp Wells Fargo Aa3/NR/NR CMBS
Starwood STWD 2018-URB US$16.600 2.6 4 1mL+150bp Wells Fargo A3/NR/NR CMBS
Starwood STWD 2018-URB US$18. 700 2.6 4 1mL+200bp Wells Fargo Baa3/NR/NR CMBS
Starwood STWD 2018-URB US$37.200 2.6 4 1mL+305bp Wells Fargo Ba3/NR/NR CMBS
Storm 2018-II €850 5. 0 3mE+60bp Rabobank/Societe Generale Aaa/AAA/AAA RMBS
TOWER BRIDGE FUNDING NO 3 £412.5 2.69 3mL+120bp JP Morgan / Barclays / NatWest Markets Aaa/NR/NR RMBS
TOWER BRIDGE FUNDING NO 3 £28.5 3. 25 3mL+180bp JP Morgan / Barclays / NatWest Markets Aa2/NR/AAA RMBS
TOWER BRIDGE FUNDING NO 3 £22.5 3. 25 3mL+220bp JP Morgan / Barclays / NatWest Markets A2/NR/NR RMBS
TOWER BRIDGE FUNDING NO 3 £13.5 3. 25 3mL+260bp JP Morgan / Barclays / NatWest Markets Baa/NR/NR RMBS
TOWER BRIDGE FUNDING NO 3 £10 3. 25 3mL+375bp JP Morgan / Barclays / NatWest Markets Ba3/NR/NR RMBS6 Bonds 2250 p25-55.indd 45 07/09/2018 19:30:00