Standard & Poor's upgrades Paragon

7 January 2009

The ratings agency upgraded the mezzanine classes issued on the First Flexible No.4 PLC from AA- to AA and from A+ to AA on First Flexible No. 5 PLC.

This followed analysis that showed increased levels of credit enhancement along with underlying levels of collateral that continues to perform well.

S&P also affirmed the ratings on the class B notes and 'AAA' rating on the class A notes issued in both deals.

The First Flexible portfolios are mainly made up of buy-to-let loans and are backed by first-ranking residential mortgages secured over properties in the United Kingdom.

Nigel Terrington, chief executive of the Paragon Group, says: “We are delighted that Standard & Poor's has recognised the quality of these deals and the strength of the cashflow generated by the mortgages, reflecting the considerable effort and experience given to the careful management of the loan portfolios.”