TIDMCCFS
RNS Number : 9431B
Charter Court Financial Svs Grp PLC
16 January 2018
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY
OTHER JURISDICTION IN WHICH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
16 January 2018
For immediate release
CHARTER COURT FINANCIAL SERVICES GROUP PLC
(Company number 06712054)
Disposal of economic interest in Charter Mortgage Funding 2017-1
plc (the "Transaction")
Charter Court Financial Services Group plc ("Charter Court" or
the "Group") today announces that it has agreed to sell its entire
economic interest in the Charter Mortgage Funding 2017-1 plc
securitisation ("CMF 2017-1") to Merrill Lynch International
("BofAML") for cash consideration of GBP26.5 million, payable on
completion. The Transaction, which is expected to complete today,
will involve the sale of the Class Z and subordinated notes and the
residual certificates ("RC1s and RC2s" and, together with the Class
Z and subordinated notes, the "Bonds") to the securitisation.
BofAML managed the sale process and purchased the Bonds for onward
sale.
The Transaction will generate a pre-tax gain of GBP15.0 million
(which will be attributed to the 2018 financial year). It will also
result in a reduction in the gross assets of the Group of c.GBP293
million(1) and a reduction in risk weighted assets currently
attributable to the securitised mortgages of c.GBP97 million. The
associated increase in common equity tier 1 capital ratio through
the reduction in risk weighted assets and the one-off gain (once
verified) will be reinvested to support new loan originations in
Charter Court's specialist lending segments and ongoing business
activities. During the period between 27 July 2017 (the date that
CMF 2017-1 was issued) and 31 December 2017, the assets being
disposed of contributed GBP4.5 million in profit before tax based
on un-audited figures.
Charter Court is also pleased to report that as at 31 December
2017, the Group's loan book stood at GBP5.4 billion with new loan
originations in the year amounting to GBP2.7 billion based on
unaudited figures.
Commenting on the Transaction, Ian Lonergan, CEO of Charter
Court, said:
"This has been an excellent transaction for Charter Court which
demonstrates the investor confidence in the quality of our
underwriting processes, underpinned by our track record of growing
our loan book without sacrificing asset quality. I am also pleased
with the delivery of strong net loan book growth and originations
in 2017 as we continue our journey post-IPO. We look forward to
presenting the full year results and broader business performance
in March".
Sebastien Maloney, CFO of Charter Court, added:
"This transaction further demonstrates our proactive approach to
asset-liability and capital management together with our ability to
execute capital markets transactions. The Group also recently
closed a funding line with an affiliate of BofAML, which will
further increase funding diversity through 2018 and beyond. I would
also like to take this opportunity to note the recent changes to
the standardised approach to credit risk introduced by Basel III
regulations and affirm that we expect the impact of these to be
broadly neutral for Charter Court."
Background on CMF 2017-1
CMF 2017-1 was issued on 27 July 2017 and securitised
approximately GBP297m of prime residential mortgages originated by
Charter Court Financial Services Limited. At the time of issuance,
CMF 2017-1 sold all of the rated notes (classes A, B, C and D) in
the securitisation to third-party investors and Charter Mortgages
Limited, a Charter Court group company, purchased the Bonds. The
Transaction will result in the de-recognition of the securitised
mortgages and, as a liability, the senior most notes (classes A, B,
C and D) from the Group balance sheet.
The Transaction will settle on Thursday 18 January 2018.
A copy of this announcement will be available on Charter Court's
website at: http://www.chartercourtfs.co.uk/
(1) Includes GBP15 million of non-mortgage assets in CMF
2017-1.
Enquiries
Charter Court Financial Services Group
plc 01902 625929
Sebastien Maloney
020 7638
Citigate Dewe Rogerson 9571
Andrew Hey
Caroline Merell
Jos Bieneman
Important notices
This announcement contains statements which are, or may be
deemed to be, "forward-looking statements" which are prospective in
nature. All statements other than statements of historical fact are
forward-looking statements. They are based on current expectations
and projections about future events, and are therefore subject to
risks and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words
such as "plans", "expects", "is expected", "is subject to",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "believes", "targets", "aims", "projects" or words
or terms of similar substance or the negative thereof, are
forward-looking statements, as well as variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations. Forward-looking statements include statements
relating to (a) future capital expenditures, expenses, revenues,
earnings, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects, (b) business and
management strategies and the expansion and growth of Charter
Court's operations, and (c) the effects of global economic
conditions on Charter Court's business.
Such forward-looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
actual results, performance or achievements of Charter Court to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Important factors that could cause actual results,
performance or achievements of Charter Court to differ materially
from the expectations of Charter Court, include, among other
things, general business and economic conditions globally, industry
trends, competition, changes in government and other regulation and
policy, including in relation to the environment, health and safety
and taxation, labour relations and work stoppages, interest rates
and currency fluctuations, changes in its business strategy,
political and economic uncertainty and other factors as may be
identified in relation to the disposal. Such forward-looking
statements should therefore be construed in light of such factors.
Neither Charter Court nor any of its directors, officers or
advisers provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Other than in accordance with its legal or regulatory obligations
(including under the UK Listing Rules and the Disclosure and
Transparency Rules), Charter Court is not under any obligation and
it expressly disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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