Fleet Mortgages announce upgrading of its loan origination notes by Moody’s Investor Services

Fleet Mortgages, the buy-to-let specialist lender, has today announced the ratings of three of its loan origination notes have been upgraded by Moody’s Investor Services.

The notes upgraded are London Wall Mortgage Capital plc: Fleet 2016-1 and London Wall Mortgage Capital plc: Fleet 2017-01 with Moody’s saying the decision reflected their better than expected collateral performance and the increased levels of credit enhancement.

The ratings agency said the action was prompted by ‘decreased key collateral assumptions, namely the Expected Loss assumptions due to better than expected collateral performance’ and ‘an increase in credit enhancement for the affected tranches’.

Moody’s decreased the expected loss assumption to 1.2% from 1.65% in Fleet 2016-1, and from 2.2% to 1.3% in Fleet 2017-1.

The agency said the decision to upgrade ‘also took into account the increased uncertainty relating to the performance of the UK economy on the transaction over the next few years, due to the on-going discussion relating to the final Brexit agreement.

The Fleet 2016-1 issuance contains £203.7m of Class A notes, £11.8m of Class B, and £14.2m of Class C, while the Fleet 2017-1 contains £337.2m of Class A, £19.8m of Class B, and £27.8 of Class C.

The upgrading of the notes follow the recent announcement of Fleet Mortgages’ new funding partnership with asset manager, One William Street (OWS) Capital Management. The additional funding with New York-based alternative investment adviser, OWS, brings the amount of money the lender has to lend in the UK buy-to-let market up to £1.4 billion.

Bob Young, Chief Executive Officer of Fleet Mortgages, commented: “We are very pleased to hear that our loan origination notes have been upgraded by Moody’s as this is another vote of confidence in us as a lender, and the quality of the loans that we originate. We should not forget that these are loans originated through the intermediary sector via the first-class advisers that recommend our products. Our focus has always been on the quality of mortgage we can originate and, by working with the best intermediaries – who are able to access our state-of-the-art underwriting process – we can continue to make sure they are of the highest quality. Fleet Mortgages will continue to work in this way and will hopefully continue to out-perform the initial expectations of the rating agencies.”