Second Keystone Warehouse and Progress Update
THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN
OR INTO OR FROM THE UNITED STATES,
CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN.
6th April 2021
UK MORTGAGES LIMITED
(a closed-ended investment company incorporated in Guernsey with
registration number 60440)
LEI
549300388LT7VTHCIT59
Second Keystone Warehouse and Progress Update
The Board of UK Mortgages Limited (“UKML”, the “Company”) and
TwentyFour Asset Management LLP (“TwentyFour”) are pleased to
announce that the Company has completed the arrangement and signing
of a new warehouse facility arranged by Santander Corporate and
Investment Banking (“Santander”), called Cornhill Mortgages No.7
Limited. This will fund the forward flow purchases of newly
originated Buy-to-Let mortgage loans from the Company’s ongoing
arrangement with Keystone Property Finance (“Keystone”) following
the highly successful securitisation of the first pool of Keystone
loans into the Hops Hill No.1 securitisation in January of this
year.
Santander, who were Joint Arranger and Joint Lead Manager on
Hops Hill No.1 as well as Sole Arranger and Joint Lead Manager for
the Company’s Oat Hill No.2 transaction in July 2020, will also be the swap provider for the
facility. The transaction is intended to fund portfolio growth to a
size suitable for a further public securitisation into what is then
be expected to be the second Hops Hill transaction.
Performance of the original loan pool has been extremely strong
with no loans currently in arrears, and just 29 Covid-19 payment
holidays granted from over 1,900 loans originated, almost all of
which have already begun repayments of their deferred amounts. The
risk profile of the new portfolio is expected to remain broadly
similar to the previous one.
Since Keystone commenced lending in partnership with UKML in
late 2018 and have subsequently become further established as a
standalone lender, their monthly origination levels have continued
to grow, culminating in a record month in March 2021 with over £40m of origination. This
means that the pre-funding phase of the Hops Hill No.1 transaction
has been completed early (other than any loans which might be used
to replace any prepayments that might occur between now and the
first Interest Payment Date in May) thereby enhancing value for the
Company, and once the final elements of capital remaining in the
previous Cornhill No.4 facility have been utilised today, funding
from the new facility is expected to commence from tomorrow,
Wednesday 7th April. Furthermore, the early completion of the Hops
Hill No.1 pre-funding means the additional origination, which
already includes an extremely healthy pipeline of well over £100m,
will go into the Cornhill No.7 vehicle sooner than expected,
thereby initiating the growth of further returns for the Company
earlier.
Overall, this means that in just 4 months since shareholders
approved the revised fund mandate last December, all of the major
objectives from that proposal have now essentially been
accomplished:- the securitisation of the first Keystone portfolio,
the agreed sale of the two lower-yielding Coventry portfolios; with
one sale and the resultant first tender already completed and with
the second sale and subsequent tender expected to take place in
late May and early June respectively, and now the agreement for the
second Keystone warehouse has been finalised and will begin funding
almost immediately. Furthermore, all these objectives have been
achieved on better terms than originally indicated and/or in an
accelerated timeframe - thereby locking in and adding value for and
to the Company.
As a result, the Company is now firmly positioned to deliver its
primary objective of generating stable long-term income for
investors, and with additional income growth now forthcoming from
this new facility.
For further information:
TwentyFour Asset Management LLP
Rob Ford
Douglas Charleston
020 7015 8900
Numis Securities Limited, Corporate Broker
Nathan Brown
Hugh Jonathan
020 7260 1000
Important notice
This announcement has been prepared for information purposes
only, it is not a prospectus.
The distribution of this announcement in certain jurisdictions
may be restricted by law. Persons into whose possession this
announcement comes are required by the UKML, TwentyFour and Numis
to inform themselves about, and to observe, such restrictions.
Recipients of this announcement who are considering acquiring
New Shares in UKML are reminded that any such acquisition must be
made only on the basis of the information contained in the
Prospectus and any supplementary prospectus(es) thereto which may
be different from the information contained in this
announcement. This announcement does not constitute or form
part of and may not be construed as an offer to sell, or an
invitation to purchase, investments of any description, nor as a
recommendation regarding the possible offering or the provision of
investment advice by any party. No information in this
announcement should be construed as providing financial, investment
or other professional advice and each prospective investor should
consult its own legal, business, tax and other advisers in
evaluating any investment opportunity. In particular, an
investment in UKML involves a high degree of risk and prospective
investors should read the section in the Prospectus entitled "Risk
Factors" for further information.