LendInvest has securitised £259m of UK prime buy-to-let mortgage loans in an oversubscribed RMBS transaction.
LendInvest said this is to continue to drive down its cost of capital and its move towards the mainstream mortgage market. In addition to reducing the cost of funding, the process frees up LendInvest’s capacity to fund future buy-to-let mortgage loans.
Christian Faes (pictured), co-founder, and chief executive of LendInvest, said: “This is a significant milestone for LendInvest.
“This securitisation provides us with funding that is cheaper than if we were a small deposit-taking bank, and proves out our business model and its scalability.
“We are building a new type of financial services business that can properly take on and challenge the banks in this market.
“The securitisation received strong support from the market, with new institutions coming into the fold, and buying loans originated through the LendInvest platform.”
LendInvest is the UK’s first marketplace platform to securitise its own assets. The securitisation received an AAA rating, for 83% of the securitization, from both Moody’s and Fitch, the global credit rating agencies.
The senior tranche for the inaugural issue was priced at 1.3% over SONIA.
LendInvest launched its buy-to-let product in late 2017 after initially receiving funding from Citigroup for the product.
Since then, LendInvest has expanded its reach in the buy-to-let mortgage market, reporting in its most recent financial results that it originated nearly £130m of buy-to-let mortgage loans in the six months to 31 March 2019.
Citi acted as sole arranger on the securitisation, Mortimer BTL 2019-1, an inaugural RMBS transaction backed by a portfolio of UK prime buy-to-let mortgage loans. BNP Paribas, Citi and HSBC acted as joint lead managers.
In April LendInvest raised £200m from HSBC to launch its first homeowner loan product.