Bluestone completes inaugural securitisation with £210m fund raising

By Bridging Loan Directory 2nd September 2019

Bluestone Mortgages has today announced the completion of its inaugural residential mortgage backed securitisation, Genesis 2019-1. The transaction, which raised £210m of rated term funding for the business comes on the back of strong growth for Bluestone which has seen a year on year increase in completions of 275%. Over the past 12 months the business has processed in excess of £520m in mortgage applications from a growing network of accredited intermediaries.

The Genesis transaction represents an important milestone in diversifying Bluestone’s funding strategy alongside two warehouse facilities provided by Macquarie Bank and National Australia Bank together with a forward flow arrangement with one of the UK Challenger banks. The bonds issued as part of Genesis were rated by both DBRS and Standard & Poors rating agencies. The portfolio consisted of 1,091 mortgages with a weighted average LTV of 67%.

Peter McGuinness, Group CEO at Bluestone, comments:

“Securitisation has been core to Bluestone’s DNA since 2000, with the wider Bluestone group having completed in excess of 25 transactions across residential and equity release mortgages and motor finance loans. Completing Genesis before the end of the summer has been the target and is a testament to the quality of the portfolio we have originated; we are delighted to welcome a new set of institutional investors to the platform. With the shadow being cast by Brexit over the near term, our focus has been on clearing out the warehouse facilities and ensuring the business has a robust funding position going into 2020 to support the strong origination growth we are seeing.”

Bluestone’s core proposition is the provision of owner occupied and buy-to-let first charge residential mortgages to borrowers who do not conform to traditional high street lending criteria. As a technology led specialist lender, Bluestone has invested heavily in the development of a proprietary loan submission and workflow platform, BlueLink, designed to give mortgage advisors and their clients a market leading service experience. Included in this development is Bluestone’s recent pilot with an Open Banking solution that is expected to be rolled out to the wider market before the end of 2019. The Open Banking service is provided by Experian and has significantly reduced the time taken to submit and assess applicants’ bank statements in Bluestone’s underwriting process.

Bluestone Group has also just completed its sixth securitisation of motor finance receivables in Ireland, raising €48 million through the issue of Bonds by Topaz 2019-1 DAC. The bonds are backed by a portfolio of consumer hire purchase agreements provided to customers who typically find it harder to source motor finance from manufacturers or high street banks.