Paragon set to launch another securitisation

Paragon Mortgages is set to launch its second securitisation in just under a year – a £273m issue.

Lloyds Bank, Macquarie Bank and Morgan Stanley have been appointed joint lead managers. The final terms have yet to be decided.

The bond has been given a provisional AAA rating and is made up of prime buy-to-let loans, primarily in London and the South East.

A Paragon spokeswoman says: “Paragon is a regular participant in the securitisation market and we have appointed lead managers to our next transaction. We will update the market on the deal in due course.”

Paragon last launched an asset-backed security in October 2012, a £200m bond which was used to fund mortgage lending. In November 2011 the lender launched a £150m securitisation, its first since 2007.

The lender uses the proceeds from its securitisation to replenish its revolving warehouse facilities.

Presently, has a total credit facility of £450m, after extending the £200m facility from Macquarie Bank to £250m in November and agreeing a further £200m facility with the wholesale division of Lloyds Bank in September.

The lender’s half year results, published in May, show it advanced £102.3m in buy-to-let loans in the six months to the end of March, up 14.6 per cent on the £89.2m a year earlier. It advanced £135m in the third quarter alone, bringing its total advances for the year to £237.7m.

Paragon Group of Companies, the parent of Paragon Mortgages, had been in talks with National Counties Building Society over the purchase of private bank Hampshire Trust, which would give it a banking licence, but a deal failed to emerge. It is, however, still looking to acquire a banking licence.