Dilosk bids to securitise €220m of mortgages
Dilosk, the Dublin-based non-bank lender, is planning a fresh securitisation of up to €220m of Irish mortgages it has originated since 2017, the Irish Independent has learned.
The figure will represent all the buy-to-let mortgages that have been drawn down by Dilosk clients since it started lending in January 2017 via the ICS Mortgages brand that it acquired in 2014 from Bank of Ireland.
The planned securitisation - which sees mortgage-backed bonds listed on the stock market - will be Dilosk's third since 2015. Its first offer in 2015 involved the securitisation of €206m of mortgages it acquired with the purchase of ICS.
In 2017, Dilosk bought €160m of mortgages that had been originated by GE Capital. Last October, it bought the €182m Irish mortgage book of Leeds Building Society, which exited the market here.
Last November, Dilosk completed the securitisation of a €268m pool of mortgages that had been originated by GE and Leeds Building Society. That securitisation had been two times oversubscribed, according to Dilosk CEO and co-founder Fergal McGrath.
He told the Irish Independent that the securitisation of the buy-to-let mortgages is dependent on market conditions in the second quarter, but could be in the €200m to €220m range. It will involve all the drawn-down buy-to-let mortgages originated by ICS at the time it's executed.
"It will be 100pc residential buy-to-let properties, all originated by ourselves," said Mr McGrath. "It will be different to the previous two that we did, which were primarily owner-occupied [mortgages] from acquired portfolios."
Dilosk currently has total assets under management of about €615m and Mr McGrath estimated that the firm has about a 30pc share of the buy-to-let mortgage market in Ireland.
He added that about 50pc of buy-to-let properties are still bought with cash, but that as the market normalises in the next two to three years, the figure could drop to around 30pc.
Mr McGrath said that pre-crash, the buy-to-let market was about €6bn in mortgages a year.
He said he expects the market to be worth about €500m a year by 2020, and probably won't exceed €1bn.
Dilosk's backers include a Luxembourg vehicle owned by Chenavari Capital.
Mr McGrath said he envisages that Dilosk, which is also planning an entry to the owner-occupier mortgage market this year, aims to be undertaking about one securitisation every year, adding that it gives the firm an efficient source of funding.
"We will also look at diversifying the funding, with other capital markets instruments as well," he said, adding that could include a private placement.