Finance Ireland plots €200m bond deal
STATE-backed lender Finance Ireland plans to issue its first residential mortgage-backed security (RMBS) weeks after getting out of the blocks with its first commercial mortgage-backed securitisation, the Irish Independent has learned.
The securitisation - likely to feature more than €200m of residential mortgage loans - will provide access to fresh debt funding for the lender from the international market.
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The securitisation isn't expected to happen until later this summer at the earliest and will depend on market conditions.
A spokesman for Finance Ireland declined to comment.
Finance Ireland, headed by banker Billy Kane, has become the country's biggest non-bank lender. Its loan book exceeds €1bn across commercial, residential, SME and agri sectors.
The company includes a significant car finance lending business backed by Close Brothers.
It entered the residential mortgage market last year after acquiring the residential mortgage business from Pepper Money.
The acquisition of that €200m loan book was backed by UK-based M&G Investments.
While the Pepper business had focused on so-called near-prime clients, such as self-employed borrowers, Finance Ireland has expanded to the general mortgage market.
US investment firm Pimco and the Ireland Strategic Investment Fund both own 31pc stakes in Finance Ireland. Between them, they have invested €85m since 2015.
Last month, Finance Ireland moved to securitise the bulk of the commercial property loans on its books since entering that market in 2015.
The bond deal was backed by a portfolio of 139 loans to 78 borrowers secured on 244 commercial properties.
None of the loans is in arrears and the average loan size is €1.6m.
The commercial mortgage-backed securitisation (CMBS) deal was only the second of its kind in Ireland since the financial crisis.
The planned residential mortgage securitisation would involve loans acquired by Finance Ireland when it bought the Pepper Money business.
Depending on the timing of the securitisation, it also may include mortgages that have been issued since February by Finance Ireland.