Kensington gears up to launch securitisation

15 July 2010 | By Natalie Thomas

The lender intends to issue between £175m and £250m of assets, comprised of buy-to-let and prime deals.

In its annual report this week, Investec says: “We look forward to executing our first securitisations during the year as the asset-backed securitisation market reopens.”

Kensington returned to prime lending in November 2009 and has recently launched a complex prime range.

In its report it says: “Liquidity is no longer a constraint although the cost of raising and carrying surplus liquidity is having a negative impact on net interest income.

“We have very little reliance on the wholesale markets and the UK market is showing signs of growth once more, we are well positioned to take advantage of this upturn in the market.”

The firm says the outlook for Kensington’s bad debts is substantially lower than at this time last year and the corporate market has opened to new relationships that it is looking to take advantage of.

 Kensington held £1.78bn of mortgages at the end of March, of which £626m were near prime, according to the company’s annual report.

Impairment losses on loans and advances relating to the Kensington business amount to £81.2m, compared with £93.2m in 2009.

Its operating profit before goodwill, non-operating items and taxation was £37, 262 for the year to March 2010.

A spokeswoman for Kensington says: “We have nothing structured at the moment but a securitisation is something we wish to do later in the year. It will comprise of buy-to-let and prime mortgages.”

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