Dilosk lines up €200m for new mortgages
New Irish lender Dilosk has kicked off a process to raise €206m on the bond market for new mortgages. The deal will cement the entry of a new player in the market for the first time since the crash.
Dilosk, which was approved as a lender by the Central Bank last year, is looking to raise the cash secured against a book of former ICS mortgages that it bought from Bank of Ireland in 2014.
An investor road show will run from May 14 to May 18 targetting money managers in the UK and Europe.
The new bond deal is expected to price on May 18.
Dilosk expects to begin new lending in the fourth quarter of this year.
The new bond offering is part of the company's long term plan for new lending focused on the Irish residential investment (buy-to-let) sector, Dilosk said.
Deutsche Bank has been mandated as sole arranger and lead manager for the planned residential mortgage backed securities (RMBS) bond deal.
According to details circulated to potential investors, the Dilosk portfolio that will underpin the new bond deal is made up overwhelmingly of high quality home loans. Less than half of 1pc of the portfolio of 1,900 mortgages are in arrears, and a similarly tiny share of the loans are in negative equity.
The average balance owed on the loans is €107,000 and the average loan to value ratio is 48.83pc - down from 65pc when the loans were issued.
It means that the debt owed on homes connected to the portfolio is less than half the current value of the properties involved.
In future Dilosk will focus on the buy-to-let sector, but just 12.6pc of its existing portfolio is made up of investors mortgages.