Banking and Credit Bulletin | 27 April 2023

Banking – Bluestone Mortgages sold to Shawbrook (Debtwire) 

• Shawbrook Group announced that it has signed an agreement to acquire Bluestone Mortgages, a UK-based specialist mortgage lender focused primarily on owner-occupied mortgages 
• Bluestone Mortgages was established in 2014 and has since rapidly secured a notable share of the UK specialist mortgage market 
• Shawbrook has maintained a successful relationship with Bluestone since 2017, establishing a platform lending arrangement 

RMBS – Non-bank lender Dilosk markets its sixth RMBS which is its first STS securitisation (Debtwire) 

• The deal is backed by a €540.7m pool comprising 2,427 loans with an average coupon of 2.5% 
• The average seasoning is 26.8 months, with 89% of the pool paying fixed rate interest 
• Six tranches are on offer, with the E and X notes offered on a ‘call desk’ basis 

RMBS – Fingal Securities RMBS to be called (Debtwire) 

• Irish RMBS backed by a pool acquired from Lloyds is to be called at 28 April 
• The outstanding collateral balance was €618.3m, with total delinquencies of 6.7% 

Banking – Ulster Bank to Transfer €4bn to UK as its Irish branches close (The Irish Times) 

• Ulster Bank to repatriate more than €4 billion of capital to its UK parent, NatWest Group, as the bank closes its remaining 63 branches and its cash machines in the Republic 
• The bank has also passed shareholder resolutions that have created “profits available for distribution” of €4.24 billion, according to recent filings with the Companies Registration Office  

Banking – Fitch raises BCP’s rating (Jornal Económico) 

• Fitch Ratings raised BCP’s Long-Term Issuer Default Rating from ‘BB’ to ‘BB+’ and its Viability Rating from ‘bb’ to ‘bb+’  
• In 2022, NPE exposures decreased around €535m, of which €265m resulted from the sale of REOs. The NPE ratio decreased from 4.7% in 2021 to 3.8% 

M&A – Bankinter Consumer Finance and Sonae establish a joint-venture to create a consumer credit operator in Portugal (Sonae) 

• The transaction has an underlying equity value of c.€45m and involves the sale of 50% of Universo’s share capital to Bankinter Consumer Finance for an estimated amount of €19m 
• The agreement also entails an additional payment of up to €5m, contingent and deferred for five years 
• Universo has more than one million clients and a credit portfolio of approximately €400m, with a turnover of €30m in 2022 

Banking – novobanco increases capital by €263m and the Portuguese State now owns almost 12% of the bank (novobanco) 

• In the General Shareholders Meeting, a capital increase of approximately €263m was approved funded through the conversion of tax credits 

• Additionally, the bank will issue 739 million new shares 
• Per the agreement between the Resolution Fund and the shareholder Lone Star, the capital increase dilutes only the participation of the Resolution Fund 

Banking – ECB authorises accounting treatment request from BCP which improves capital ratios (Jornal Económico) 

• The European regulator approved the application of an article which shall exclude structural foreign exchange positions held to hedge capital ratios from capital requirements 
• As a result, BCP’s CET1 ratio increased from 12.5% (2022) to 13% (2023), while its total capital ratio improved from 16.8% to 17.5% 

Banking – BCP postpones dividends and distributes €10m to employees (Jornal Económico) 

• The payment of almost €10m completes the employees’ remuneration programme stipulated in 2014, which was intended to compensate employees for salary pay cuts that occurred between 2014 and 2017, while the bank was funded via State capital (in the form of CoCo’s bonds which are contingent convertible bonds) 
• Despite the improvement in capital ratios compared to the previous year (the CET1 ratio improved from 11.7% in 2021 to 12.5% in 2022), the Board of Directors decided to postpone the distribution of dividends 

Banking – DBRS raised novobanco and Montepio ratings (ECO, Jornal Económico) 

• DBRS upgraded the ratings on Montepio including the Long-Term Issuer rating and the Long-Term Senior Debt from B to B (high) 
• The rating agency improved novobanco´s Long Term Issuer ratings from B (high) to BB (low) 

Banking – CGD was notified by Banco de Portugal of its MREL requirements (CGD) 

• From 1 January 2024, the requirement of own funds and eligible liabilities will be equivalent to 22.45% of total risk-weighted assets plus the combined buffer of 3.5%, corresponding to a total requirement of 25.95% (23.12% required from 1 January 2022) 

M&A – Finsolutia sold majority stake to UK-based Pollen Street Capital (ECO) 

• Finsolutia is a Portuguese servicer founded in 2007 that manages credit and real estate assets with more than 350 employees and assets under management of around €6bn  
• Pollen Street, founded in 2013, is a fast-growing private equity with over €3.7bn in assets under management 
• Finsolutia’s management team will be kept in the leadership of the company which Pollen Street’s investment will reinforce and enhance its geographic expansion and develop its technological capabilities 

Funding – Achmea Bank invests €1.5bn into mortagees from Munt Hypotheken (fd.) 

• The platform is owned by Dutch Mortgage Funding Company (DMFCO) and receives funding from the Banking arm of insurer, Achmea 
• The agreement enables Achmae to influence the loan terms such as the fixed rate periods, accommodating market demand for shorter fixed periods on mortgages in a high interest rate environment 
• Munt acts as servicer, and Achmea will place the assets on its own balance sheet. Achmea already offers mortgages via its own brands Centraal Beheer and Woonfonds, and views the Munt investment as a means to accelerate the growth of its mortgage portfolio 
• DMFCO has a mortgage portfolio of c.€25bn placing it in the top 10 Dutch providers 

ABS – Hiltermann Lease priced its first issuance of the year (Debtwire) 

• Hiltermann Lease priced its latest auto ABS from its Hill FL programme with a granular pool backed exclusively by financial leases with a revolving period of nine months 
• The AAA/Aaa-rated (Fitch/Moody’s) €394m Class A notes priced at par at a margin of 76bps over 1ME with a WAL of c.2.5 years and an advance rate of 86.5% 
• Classes B (€27m), C (€16m) and D (€14m) rated AA/Aa2, A+/A2 and BBB+/Baa3 priced at par at a margin of 160bps, 260bps and 440bps over 1ME, respectively, with WALs of 2.7 years 
• The retained €4.6 Class E (unrated) notes pay a fixed coupon of 9%  
• The provisional pool of €416m financial leases comprises c. 23k customers, has a WA term of 56.7 months and 8.9 months seasoning. There is no residual value exposure

Funding – Raisin raises €60m in funding (finanz-szene) 

• The fintech completed its fifth financing round with the last round in 2019 raising €100m 
• According to finanz-szene, participants included M&G Catlyst and Goldman Sachs 
• While its valuation has been controversial for years, the German fintech is considered a unicorn hitting a €1bn valuation in 2021 

Credit – The BNPL provider Billie enters a strategic partnership (Fintech Finance News) 

• The partnership between Billie the leading Buy Now Pay Later (BNPL) payment solution and Mollie, a French payment provider, enables Mollie’s merchant customers to access Billie’s BNPL product 
• This corporation will allow businesses to optimise working capital, further leverage the tool for growth and simplify the purchasing experience for all businesses 

ABS – FCA Bank priced its reoffer of the Class A notes from its August 2021 issuance (Debtwire) 

• FCA Bank, a joint venture between FCA Italy and Crédit Agricole Consumer Finance, issued auto loans in Germany which it securitised in 2021 
• A-BEST 21 reoffered its previously retained A-tranche of €400m 
• The AAA/Aaa (Fitch/Moody’s) rated note priced at a spread of 57bps above 1ME. The tranche has a 1.2 year WA life and 17.4% CE 
• Initially cautious, IPTs of 60bps plus 1ME were viewed as surprising given the backdrop created by the recent banking turmoil. However, the comparable FCT Cars Alliance Auto Loans Germany, which was placed at the beginning of March, priced 9bps lower. Closer to placement, the initial IPTs then indeed compressed slightly, albeit increasing coverage of 1.5x 
• The asset pool has been revolving since its issuance in August 2021, and the revolving period ends in August 2023, after which the notes pay sequentially. The assets are a mix of German auto loans (48%) and leases (52%) granted to c.41k borrowers. The pool is well seasoned at c.19 months