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Investec launches £200m Kensington and GMAC securitisation

Kensington Mortgages parent company Investec has launched a £200m securitisation backed by a pool of non-conforming residential mortgages.

There are approximately 2,167 loans in the pool, made up of sub-prime and self-cert mortgages, which were originated pre-2008 by Kensington Mortgages and former sub-prime lenders Money Partners and GMAC-RFC.

Some 60 per cent of the loans were originated by Kensington while Money Partners and GMAC-RFC originated 8.1 per cent and 31.8 per cent of the loans respectively.

The average loan-to-value of the mortgages in the pool, which all track either base rate or Libor, is 73.9 per cent.

Investec says the proportion of loans in arrears is around 7 per cent.

The coupon for the £150m AAA tranche is 225 basis points above three-month Libor. The other tranches have zero coupon, which means there has been no significant interest from investors yet.

There have been two other non-conforming transactions this year, including a £200m bond from Investec in March and a £340m bond from Credit Suisse in April.

Investec head of structuring Derek Lloyd says: “Things seemed to have rallied in this market quite a lot recently in terms of appetite.”

S&P analytical manager of new RMBS issuance in EMEA Farid Shavaksha says: “When something new or rare comes onto the market, it is always positive. This transaction shows increasing investor confidence and appetite for this type of debt.”

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