Castell Finance 2017-1: 12 July 2017

** UPDATED (24th Jan 2018) in regard to current BofE eligibility status *

The first public securitisation from Optimum Credit Limited will be a standalone issuance, where the Issuer will make payments on the Notes from payments of principal and revenue received from a portfolio comprising second or subsequent ranking mortgage loans that have been originated by Optimum Credit Limited and secured over residential properties located in England, Wales and Scotland.

Optimum Credit Limited is currently one of the UK’s largest originators of second charge mortgage loans with a market share of 21.3% in March 2017. It also offers specialist servicing of second charge mortgage portfolios. OCL originates second charge mortgage loans via two channels: loan brokers and direct-to-consumer. OCL is indirectly owned by funds managed and/or advised by Patron Capital Advisers LLP.

The Provisional Mortgage Portfolio consists of 5,823 second-charge repayment loans, where the average current balance is £41,612 and the largest is for £493,660. All loans refer to owner-occupied properties, and none of the loans are self-certified. Interest rate type (by current balances): floating 45.73%, fixed 40.94%, discounted 13.32%. Current months in arrears: 1mnth – 0.57%, 3mnths – 0.09%. Regional concentration: South East 24.29%, London 23.01%, East of England 15.47% and the South West 7.34%. The WA CLTV is 64.10% (WA OLTV was 64.76%) and the WA seasoning is 10 months.

Note that Substitution of the Mortgage Loans contained in the Mortgage Portfolio may occur in accordance with the terms described within the prospectus.


CRR: On the Closing Date, Optimum Credit Limited (the Retention Holder") will, as an originator for the purposes of the CRR, retain a material net economic interest of not less than 5.0% in the securitisation in accordance with the text of each of Article 405 of Regulation (EU) No 575/2013, Article 51 of Regulation (EU) No 231/2013 and Article 254 of Regulation (EU) 2015/35. As at the Closing Date, the Retention will be satisfied by holding an interest in the first loss tranche, represented in this case by the retention by the Retention Holder of the Class Z Notes.

US Risk Retention: The Seller does not intend to retain at least 5.0% of the credit risk of the securitised assets for purposes of compliance with the final rules promulgated under Section 15G of the Securities Exchange Act of 1934, but rather intends to rely on an exemption provided for in Section 20 of the U.S. Risk Retention Rules regarding non-U.S. transactions.

Bank of England eligibility status: “The Issuer has been advised by the Bank of England that the Class A Notes issued by Castell 2017-1 PLC will not qualify as eligible collateral for the purposes of the Discount Window Facility, the Funding for Lending Scheme and the Term Lending Scheme” (as at 24th Jan 2018)


Compare/contrast: Residential Mortgage Securities No 29 plc, Oncilla Mortgage Funding 2016-1