Bridging lender Amicus has completed a £100m short-term mortgage-backed securitisation.
The bond is made up entirely of regulated short-term loans, with a scheduled maturity date of July 2018. The average LTV is 60 per cent while the terms of the loans range from six to 18 months.
Historically, securitisation has not been used for short-term funding deals because of the complexity and set-up costs.
Amicus chief executive John Jenkins says the bond will be used to “drive our growth ambitions in the short-term lending market”.
He adds: “The UK mortgage market is seeing a sustained and growing appetite for short-term property finance driven by the tightening of mainstream bank underwriting requirements; recent changes to planning laws; and the inability of some lenders to act sufficiently quickly to respond to demand.
“There is clear investor demand for this type of short-term mortgage-backed security.
“Many institutions are increasing their focus on the alternative finance sector as a means of enabling enhanced returns without taking on large risks. Given the continued appetite for short-term property finance, we anticipate significant growth in demand for short-term syndication of this class of debt through bond issuance.”
Brookland Partners and HSBC were advisers and agents to Amicus, which is owned by Omni Partners, the London-headquartered investment manager.