Paragon Mortgages (No 26) plc: 05 July 2019

A new stand-alone transaction from Paragon, where again the issuer will make payments on the notes from payments of principal and revenue received from a portfolio comprising buy-to-let mortgages originated by Paragon Mortgages (2010) Limited, which will be purchased by the Issuer on the Closing Date and on any date up to and including the second Principal Determination Date thereafter and which are secured over residential properties located in England and Wales.

The provisional mortgage pool (as at 31 March 2019) consists of buy-to-let loans advanced on 3,883 properties, where the average loan size is £166,206 and the largest is for £1.113mln. Product type (by balance): Fixed (reverting to SVR) – 81.96%, Libor Linked – 7.45% & SVR – 7.06%. Repayment Method: Interest only (optional switching to repayment) – 91.95%, Repayment – 8.05%. Letting Occupancy: Professional Landlords - 57.64%, Private Investor Landlords – 42.36%. The WA LTV is 70.62% and the WA seasoning is 2.67 years. Regional distribution (by balances): South East (excl. GL) – 36.32%, Greater London – 20.66%, North West – 9.12% and South West – 9.10%.

Significant Investor: On the Closing Date, PFPLC will purchase approximately 5% of the aggregate Principal Amount Outstanding of the Class A1 Notes and all of the Class A2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class Z Notes, the Class S Notes and the Class S VFN. PFPLC may retain or at a later date sell some or all of those Notes in the secondary market at variable prices. Also, on the Closing Date, the Sellers will receive the Residual Certificates as partial consideration for the sale of the Mortgage Portfolio.

EU Risk Retention: Paragon Finance plc ("PFPLC") as an originator will retain a material net economic interest of at least 5% in the securitisation as required by Article 6 of Regulation (EU) 2017/2402, which does not take into account any corresponding national measures. Such interest will consist of not less than 5% of the nominal value of each class of Notes being held in accordance with Article 6(3)(a) of the Securitisation Regulation.

US Risk Retention: The transaction is not intended to involve the retention by a sponsor for purposes of compliance with the final rules promulgated under Section 15G of the Securities Exchange Act of 1934, as amended, but rather it 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: Paragon 25, Polaris 2019-1 plc, Precise Mortgage Funding 2019-1B