Pembroke Property Finance: 06 June 2019

A commercial mortgage transaction where the Issuer will make payments on the Notes from payments of principal and interest received from (i) a portfolio solely comprising mortgage loans originated by the Seller and secured over commercial real estate properties located in Ireland as well as (ii) the Reserve Fund.

The originator and seller is Finance Ireland Credit Solutions DAC which advanced the loans, each consisting of cross-collateralised credit lines advanced to a single corporate/retail borrower. The seller is regulated by the Central Bank as a retail credit firm and conducts its commercial property lending activities under the trading name Finance Ireland Commercial Mortgages. FICM was launched in January 2016 and has established itself as a leading provider of senior secured lending in the €1m to €15m transaction size commercial property segment, including the professional buy to let residential segment. FICM’s customers are typically Irish resident professional landlords and commercial owner occupiers, borrowing through a corporate structure or directly in their own name as natural persons.

The portfolio consists of 139 fully current mortgage loans, in 78 Portfolio Mortgage Loan Sub-Groups, secured on 244 properties. The average loan balance is Eur1.603mln. Repayment type (by current balances): repayment – 91.8%, interest-only – 5.9%, rolled-up - 2.2%. Property type (By property value): retail – 30.5%, mixed use – 21.8%, industrial – 17.3%, office – 7.7% and other – 22.6%. Interest rate type (by current balances): floating – 97.5%, fixed – 2.5%. The WA current LTV is 59.8% and the WA seasoning is 14.7 months.

EU Risk Retention: The Seller, as originator, has undertaken to retain on an ongoing basis a material net economic interest of not less than 5% of the nominal value in the securitised exposures relating to the securitisation transaction in accordance with Article 6 of the Securitisation Regulation for as long as the Notes are outstanding. As at the Closing Date, the Seller will hold such material net economic interest by retaining the first loss tranche and, if necessary, other tranches having the same or a more severe risk profile than those sold or transferred to investors and not maturing any earlier than tranches sold or transferred to investors, in an amount of at least 5% of the nominal value of the securitised exposures, in accordance with paragraph (d) of Article 6(3) of the Securitisation Regulation, by the Seller’s holding of all or a portion of the Class Z Notes.

US Risk Retention: The transaction described is not intended to involve the retention by a sponsor of at least 5% of the credit risk of the securitised assets for purposes of compliance with the final rules promulgated under Section 15G of the U.S. Securities Exchange Act of 1934, as amended, but rather is intended to rely on an exemption provided for in Section 20 of the U.S. Risk Retention Rules regarding non-U.S. transactions.

Compare/contrast: DECO (24) Series 2015-Harp, Proteus RMBS (2018) DAC