KBRA Assigns Preliminary Ratings to Harbour No.2 PLC

LONDON--(BUSINESS WIRE)--KBRA UK (KBRA) assigns preliminary ratings to Harbour No.2 PLC (Harbour 2), a static RMBS securitisation and the refinance of the notes currently outstanding under Harbour No.1 PLC. Harbour 2 is backed by a non-conforming portfolio of predominantly reperforming mortgage loans (RPL). These loans are secured by owner occupied (OO, 94.0%) and buy-to-let (BTL, 6.0%) properties located in the United Kingdom (UK).

The portfolio includes loans originated by 18 different originators all of which have either closed for business or have stopped lending operations in the UK. The top three originators are GE Money (28.6%), Future Mortgages Limited (25.7%) and Amber Homeloans Limited (15.1%). At closing, the beneficial interest in the portfolio will be acquired by the Issuer from Isle of Wight Home Loans Limited (Seller). The portfolio is currently serviced by three servicers, Pepper (UK) Limited (Pepper, 40.6%), Intrum Mortgages UK Finance Limited (Intrum, 30.2%, previously Mars Capital Finance Limited, acquired from Arrow Group in 2023) and Topaz Finance Limited (Topaz, 29.2%). All three servicers have a meaningful number of years of experience servicing RPLs and loans deep in arrears which may be restructured in the future.

The Notes’ payment priority is strictly sequential. The notes also benefit from fully funded reserve funds that provide liquidity and credit support.

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publications

• UK RMBS: Growth of Specialist Lenders to Continue?
• UK Mortgage and Housing Trends: May 2024 Update
• Equity Release Mortgages: Supportive Environment for UK Expansion … and Beyond?
• UK Buy-to-Let: A Brewing Remortgage Storm?

Methodologies

• RMBS: European RMBS Rating Methodology
• RMBS: European RMBS Rating Methodology Country Addendum: United Kingdom
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union. Information on a credit rating’s endorsement status is available on its rating page at KBRA.com.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA’s Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.

About KBRA UK

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider. Kroll Bond Rating Agency UK is located at 1 Connaught Place, 2nd Floor London, England.

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