UK Mortgages Ltd: Refinancing of Malt Hill No.1 Completed
THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN.
7 June 2019
UK MORTGAGES LIMITED
(a closed-ended investment company incorporated in Guernsey with registration number 60440)
Refinancing of Malt Hill No.1 Completed
The Board of UK Mortgages Limited (“UKML”) and TwentyFour Asset Management LLP (“TwentyFour”) are pleased to announce that following the previously announced exercise of the Portfolio Option on the loans underlying the Malt Hill No.1 plc securitisation, the deal has now been fully redeemed, and the loans have been refinanced into a new warehouse facility with Lloyds Bank Corporate Markets plc, called Cornhill No.6.
This represents the completion of the first full cycle for UKML’s first investment. The pool was initially purchased in November 2015 from Coventry Building Society, securitised into Malt Hill No.1 in May 2016 for an expected 3 year term, and now refinanced as anticipated into Cornhill No.6.
As previously reported, the pool size has reduced since acquisition from approximately £310m to around £200m and this refinancing allows the Fund to re-lever the portfolio, thereby optimising returns for the Fund on the remaining loans whilst simultaneously releasing capital for further investment.
Furthermore, a significant proportion of the loans will reach the end of their current fixed rate period during the remainder of 2019 and it is likely that a number of these borrowers will chose to redeem their loans, most likely refinancing with another lender. Therefore the warehouse has been specifically structured in such a way that as loans redeem, further capital can be released, maintaining the leverage level and therefore returns for the fund. The warehouse also has the ability to add further loans should a suitable pool become available.
Performance of the pool remains exceptional with just 2 loans from over 1100 in arrears at the end of April 2019, and no loans have ever had cause to be foreclosed. The low weighted average Loan-to-Value ratio of 62.6% gives a further indication of the quality of the pool.
TwentyFour Asset Management LLP
020 7015 8900
Numis Securities Limited, Corporate Broker
020 7260 1000
This announcement has been prepared for information purposes only, it is not a prospectus.
The distribution of this announcement in certain jurisdictions may be restricted by law. Persons into whose possession this announcement comes are required by the UKML, TwentyFour and Numis to inform themselves about, and to observe, such restrictions.
Certain statements in this announcement are forward-looking statements which are based on UKML’s expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. TwentyFour's estimate of the potential gross IRR for this investment is calculated based on certain scenarios and subject to certain assumptions. This and any other references herein to potential future returns or distributions are targets and not forecasts and there can be no guarantee or assurance that they will be achieved. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, UKML undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
The information contained in this announcement is subject to change without notice and neither the UKML, TwentyFour nor Numis assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.
Recipients of this announcement who are considering acquiring New Shares in UKML are reminded that any such acquisition must be made only on the basis of the information contained in the Prospectus and any supplementary prospectus(es) thereto which may be different from the information contained in this announcement. This announcement does not constitute or form part of and may not be construed as an offer to sell, or an invitation to purchase, investments of any description, nor as a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating any investment opportunity. In particular, an investment in UKML involves a high degree of risk and prospective investors should read the section in the Prospectus entitled "Risk Factors" for further information.