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PMI Europe insures £1.8 billion mortgage credit default swap

PMI Mortgage Insurance Company Limited (PMI Europe) has announced the insurance of a mortgage credit default swap agreement between the KfW group, Germany&#39s leading promotional bank, and Aareal Bank AG, a leading international property bank.

PMI Europe is providing a £63.6 million layer of credit protection in connection with the £1.8 billion Aareal Bank mortgage-backed synthetic security, Provide Home 2002-1.

£8.2 million of this protection from PMI is a “first loss” tranche. Aareal Bank is the arranger and co-manager for the deal and Deutsche Bank is the lead manager.

This type of security – a “synthetic” – enables an issuer, such as Aareal Bank, to transfer the credit risk on assets, in this case German residential mortgage loans, to third-parties while retaining ownership of the assets. With acceptable counterparties, the transfer reduces the amount of regulatory capital the issuer must hold against the assets. The “first loss” portion of the security is so described because early losses, literally the first losses, on the mortgage pool are attributed to it.


Bank call centres poorly prepared ahead of autumn tax deadline

Call centre staff at half of the UK&#39s leading banks and building societies will struggle to help many callers gathering last-minute tax return information ahead of the Inland Revenue&#39s September 30 deadline, claims a survey conducted on behalf of Macro 4 PLC. &#39Secret shopper&#39 researchers, posing as potential customers, found that call centre staff typically […]

The mortgage mole

Bristol balloonAugust gets a bit sweaty underground, so Mole was all too eager to live the high life aboard a hot air balloon, courtesy of Bristol & West. Decked out with air-sickness bag and waterproofs &#39just in case&#39, Mole duly trekked over the fairground and beer-tent-filled hills of the Bristol balloon festival – only to […]

Self-cert lenders pass buck to brokers

Self-cert lenders are insisting their affordability checks are robust after CP146 revealed brokers may carry the can for borrower arrears under regulation. In proposals for regulating the advice process, the FSA says brokers will be responsible for assessing whether a mortgage is suitable for a customer on the grounds of “whether or not the consumer […]

The Virgin One launches first &#39Mortgage Outlook Index&#39

The Virgin One account has today launched the first &#39Mortgage Outlook Index&#39 (MOI), a quarterly index that will monitor the mood of mortgage intermediaries up and down thecountry. The research was carried out by NOP in August and covers the period April to July 2002. The first index has shown mortgage intermediaries to be robust […]


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