UKML.L Regulatory News (UKML)

UK Mortgages Ltd - UKML Fifth Transaction

PR Newswire

London, October 2

THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND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.

2 October 2018

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

Investment update

UK Mortgages Limited – Fifth Transaction Completion

2 October 2018

The Board of UK Mortgages Limited (“UKML”, or the “Company”) and TwentyFour Asset Management LLP (“TwentyFour”) are pleased to announce the successful completion of the previously announced forward flow purchase arrangement with Keystone Property Finance Limited (“Keystone”). Under this investment Keystone will originate a book of Buy-to-Let (“BTL”) mortgages, into a warehouse financing structure.

The transaction was originally announced on the 20th June 2018 and TwentyFour have subsequently appointed National Australia Bank (rated Aa3/AA-/AA- with Moody’s, S&P and Fitch) as both financing and swap provider and Pepper UK as servicer, along with assigning a number of ancillary roles to counterparties already performing the same functions for existing UKML transactions. The terms of the financing agreement, exclusive purchase agreement, detailed origination criteria, and ongoing loan management all form part of the arrangement for which documentation has been negotiated throughout the summer and has now been fully signed.

The transaction provides a second ongoing growth channel for the Company and is expected to generate a gross Internal Rate of Return (“IRR”) significantly in excess of 7% (from the date of purchase).

Importantly, following the initial allocation of part of the new capital raised in June 2018, further capital will be raised as required on an incremental basis in future periods, thereby using capital in the most efficient manner within the conservative leverage constraints of the Company, and improving the income contribution. As previously announced, the Company is also seeking to put in place a revolving credit facility to give greater flexibility in managing capital, which will further optimise returns.

Keystone operates in the specialist BTL market focussing on professional landlords and more complex cases, differentiating it from existing investments such as those backed by Coventry Building Society BTL loans, who mainly target individual property investors, as well as complementing the Company’s existing owner-occupied forward flow arrangement with The Mortgage Lender. Keystone was formed in 2007 and has been an active lender in its current form since 2012, with similar agreements for its previous funding partners. Keystone’s initial marketing has created an active pipeline at the point of completing the transaction, and early interest has been encouragingly strong.

Further information:TwentyFour Asset Management LLPDouglas Charleston020 7015 8900Numis Securities Limited, Corporate BrokerNathan Brown

Hugh Jonathan020 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.

Certain statements in this announcement are forward-looking statements which are based on UKML’s expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. TwentyFour's estimate of the potential gross IRR for this investment is calculated based on certain scenarios and subject to certain assumptions. This and any other references herein to potential future returns or distributions are targets and not forecasts and there can be no guarantee or assurance that they will be achieved. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, UKML undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The information contained in this announcement is subject to change without notice and neither the UKML, TwentyFour nor Numis assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

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.