UKML.L Regulatory News (UKML)

UK Mortgages Ltd - Further Acquisition Second Update

PR Newswire

London, June 1

UK MORTGAGES LIMITED(a closed-ended investment company incorporated in Guernsey with registration number 60440 )LEI 549300388LT7VTHCIT59

1 June 2018

UKML RNS: Further Acquisition Second Update

The Board of UK Mortgages Limited (“UKML”) and TwentyFour Asset Management LLP (“TwentyFour”) are pleased to announce that final terms have now been completed and signed for the acquisition of the pool of recently originated mortgages, announced previously on 26 April 2018.

The loans are a high quality pool of approximately £350 million of Buy-to-Let (“BTL”) non-member mortgages originated by The Coventry Building Society Group (“The Coventry”) through its Godiva brand. This will be UKML’s second transaction with The Coventry, following the inaugural £310 million purchase of BTL loans from them in November 2015, a pool which continues to perform exceptionally well.

This new pool comprises 2,077 recently originated mortgages with an average balance of approximately £169,000, and an average loan to value of 60.8%. As previously, following the transaction The Coventry will continue to service the mortgage holders as its own clients, resulting in a seamless transaction for borrowers.

Unlike the previous pool, where a large percentage of the loans had an initial fixed rate period of two years, all the loans in this transaction have approximately five years until the current fixed rate period is due to end, with the vast majority falling between November 2022 and May 2023. The lower level of prepayments typically experienced during the fixed rate period will therefore help the future term securitisation to maintain leverage for longer, thereby maintaining the investment return for longer. This is especially relevant as with current mortgage margins at tighter levels than they were at the time of the previous purchase, the overall yield of the transaction will likely be lower than before, although this won’t be fully determined until the term financing is completed.

TwentyFour will now move forward with the financing phase of the transaction and further updates will be provided when commercial and other considerations allow. This transaction deploys the Company’s current remaining capital. TwentyFour continue to see opportunities in the market and the Company will be exploring options to finance them.

Chris Waldron, Chairman of UK Mortgages Ltd said “The Board is very pleased that UKML has been able to agree a second high-quality transaction with such a strong counterparty.”

Michele Faull, Chief Financial Officer of The Coventry Building Society said, "We are very pleased with the transaction that builds on our strong relationship with TwentyFour Asset Management. The sale demonstrates the demand for the Society’s high quality mortgage portfolio whilst giving value to our membership."

Rob Ford, Portfolio Manager at TwentyFour said “To have agreed another transaction with such a high quality originator as The Coventry, with such an enviable track record and an RMBS pedigree, is at the core of our ambition for UKML.”

For further information, please contact:Numis Securities Limited:

Nathan Brown +44 (0)20 7260 1000Hugh Jonathan