The structure allows capital relief while supporting landlords
Cynergy Bank PLC has announced the launch of its first residential mortgage-backed securities transaction, a £442m deal that received ratings from S&P Global Ratings on Tuesday.
The securitisation, named Lovelace 01 CBP PLC, comprises buy-to-let mortgage loans and overdrafts backed by properties located in England, Wales, and Scotland. S&P Global Ratings assigned credit ratings to the transaction’s class A through F-Dfrd notes, with the senior class A notes receiving a AAA rating.
The mortgage pool includes loans originated by Cynergy Bank between 2006 and 2025, with more than 90% originated after 2022. The portfolio consists of commercial properties at 26.80%, mixed-use properties at 22.88% and residential properties at 50.32%, based on current balance at the property level.
“This transaction demonstrates Cynergy Bank’s ability to innovate in securitisation while keeping customer needs at the heart of our approach,” Nicholas Fuller, director of group treasury at Cynergy Bank, said in a statement. “The replenishment period gives us the flexibility to support existing borrowers with further advances and product switches, while delivering capital efficiency and balance sheet optimisation.”
The transaction features a 24-month revolving period from closing, during which the issuer can purchase new loans, further advances, product switches and overdrafts, subject to various conditions and eligibility criteria. The deal allows the bank to achieve capital relief while continuing to serve landlords.
S&P Global Ratings noted this marks the sixth transaction it has rated in the UK that securitises small-ticket commercial mortgage loans. The loans are originated with short original terms, with the majority between two- and five-year terms, and feature repayment structured as hard bullet maturities.
A distinctive feature of the transaction involves grouping borrowers into risk groups, which S&P described as not typical of RMBS transactions. Several loans can be backed by one or more properties within one risk group, with risk shared within the group through cross-collateralisation and cross-guarantees.
Lloyds Bank Corporate Markets served as arranger on the transaction. The bank plans to launch additional mortgage-backed securities in the future, all named after UK innovators. The Lovelace transaction honours Ada Lovelace, a pioneer of mathematics and computing.
