AIB signs standby deal with HML

AIB has signed a deal with HML to provide the UK’s first 48 hour ‘hot’ standby servicing arrangement, facilitating the first successful unguaranteed securitisation from an Irish institution since 2009.

The securitisation consisted of £437.6m of UK mortgage assets and the 48 hour back-up agreement was created to give investors further assurance over the servicing of the assets.

It follows an industry trend of appointing third parties as standby servicer when issuing securitisations.

David Duffy, chief executive of AIB, says: “This is a positive return to the markets for AIB and forms part of our longer term, diversified, funding strategy. It is also a further indicator of the improving international sentiment towards Ireland and the Irish financial system.”

The landmark deal varies from traditional standby arrangements, which are typically designed to deal with invocation periods of 60 to 90 days.

A full boarding of the portfolio to HML’s platform has taken place up to the stage where HML could take over servicing responsibility at just 48 hours notice. This includes a full service specification, collections policy and letter suite. HML will receive daily feeds of the portfolio data which will be reconciled on a regular basis to allow HML to execute the arrangement at any point.