DUBLIN--(BUSINESS WIRE)--Kroll Bond Rating Agency Europe Limited (KBRA) assigns ratings to two classes of notes from SMI Equity Release 2018-1 Designated Activity Company (SMI 2018-1), an Irish equity release mortgage transaction secured predominantly by seasoned equity release (aka “reverse”) mortgages. SMI Equity Release 2018-1 is, to KBRA’s knowledge, the first publicly rated securitisation of Irish/Spanish equity release mortgages (ERMs) and the first publicly rated securitisation of any European ERMs since the financial crisis.
The loans comprising SMI 2018-1 were originated by Seniors Money (Ireland) DAC and Seniors Money (Spain) Finance DAC (collectively, SMI). The Euribor-based floating rate loans are generally seasoned more than ten years, with properties predominantly located in Ireland (94.0%), with the remainder in Spain (6.0%). The Spanish properties all have UK obligors. Although SMI originated and has been servicing the portfolio since inception, SMI ceased originations in 2012 following the financial crisis. The group was, during its active period, a leading ERM lender in each market. The group was founded in 2003 and had operations in Ireland, Spain, Australia (since sold) and New Zealand (since sold). At its peak, SMI maintained a 50% ERM market share in Ireland and had amassed a global portfolio of €1.25 billion. The subject transaction is part of an overall recapitalisation plan which is expected to result in the resumption of SMI’s lending activities.
KBRA’s rating approach incorporates a review and analysis of the loan originator, servicer and other key transaction counterparties, a review of the Agreed Upon Procedure Report, and use of KBRA’s Reverse Mortgage Securitization Global Rating Methodology to analyse collateral and borrower attributes. The analysis also included an assessment of the securitisation framework from a structural and legal perspective, and ongoing surveillance of the transaction.
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