UK Mortgages Ltd Portfolio Disposal Announcement
08 February 2021 - 11:52PM
UK Regulatory
TIDMUKML
UK Mortgages Ltd: Portfolio Disposal Announcement
THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION,
RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO OR FROM THE UNITED
STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF
IRELAND OR JAPAN.
8th February 2021
UK MORTGAGES LIMITED
(a closed-ended investment company incorporated in Guernsey with registration
number 60440)
LEI 549300388LT7VTHCIT59
Agreement to Dispose of Two Portfolios Under Revised Strategy
The Board of UK Mortgages Limited ("UKML", or the "Company") and TwentyFour
Asset Management LLP ("TwentyFour") are pleased to announce that on Friday 5th
February 2021, UK Mortgages Corporate Funding Designated Activity Company ("UK
DAC") signed agreements under which, Godiva Mortgages Limited ("Godiva"), a
subsidiary of Coventry Building Society ("Coventry") has made a commitment to
purchase two buy-to-let mortgage portfolios originated by Godiva and currently
financed within the Cornhill No.6 and Malt Hill No.2 vehicles. Subject to
successful completion, the timing of these sales is expected to coincide with
the payment dates in February and May 2021 respectively. Strong market
conditions have enabled these portfolios to be disposed of at economics that
improve on those indicated to investors in late 2020 and also ahead of
anticipated timing for the Cornhill No.6 portfolio.
On the 4th December 2020, shareholders voted overwhelmingly in favour of an
updated strategy for UKML. The first objective was achieved on the 15th January
2021 through the successful securitisation of existing Keystone BTL loans in
the inaugural Hops Hill No.1 transaction. As the first European RMBS
transaction of 2021, this transaction locked in better funding levels when
compared to those achievable in the fourth quarter of 2020, improving income
materially.
The second phase of the strategy aimed to free up capital, initially through
the sale of the two Coventry portfolios, to enable capital to be returned to
shareholders by way of a tender and to fund the second Keystone investment. The
combination is expected to increase capital efficiency and to continue the
growth trajectory of income. Today's announcement marks a significant milestone
in achieving this second strategic aim.
On behalf of UK DAC, TwentyFour has simultaneously mandated a warehouse
provider for the second Keystone investment and has commenced documentation
work with an expectation of completing during March. Material improvements in
overall funding conditions will benefit this new investment over its life.
The sale of the two Coventry portfolios is expected to release capital enabling
two tenders to be carried out, returning an aggregate at the higher end of the
previously communicated £35-40 million range. These tenders are expected to
take place following the payment dates expected to be in February and May
respectively. The Board's expectation is that the tenders will take place at
75p per share.
Chairman Chris Waldron commented, "We are pleased to deliver this important
transaction ahead of schedule providing enhanced certainty for shareholders and
further advancing the updated strategy."
Douglas Charleston commented, "This sale represents the first portfolio
disposal for UKML. Its successful conclusion is recognition of the high quality
of assets within the fund. We are pleased to work again with our close partner,
Coventry."
TwentyFour Asset Management LLP
Douglas Charleston
020 7015 8900
Numis Securities Limited, Corporate Broker
Hugh Jonathan
Vicki Paine
020 7260 1000
Important notice
This announcement has been prepared for information purposes only, it is not a
prospectus.
The distribution of this announcement in certain jurisdictions may be
restricted by law. Persons into whose possession this announcement comes are
required by the UKML, TwentyFour and Numis to inform themselves about, and to
observe, such restrictions.
Recipients of this announcement who are considering acquiring New Shares in
UKML are reminded that any such acquisition must be made only on the basis of
the information contained in the Prospectus and any supplementary prospectus
(es) thereto which may be different from the information contained in this
announcement. This announcement does not constitute or form part of and may
not be construed as an offer to sell, or an invitation to purchase, investments
of any description, nor as a recommendation regarding the possible offering or
the provision of investment advice by any party. No information in this
announcement should be construed as providing financial, investment or other
professional advice and each prospective investor should consult its own legal,
business, tax and other advisers in evaluating any investment opportunity. In
particular, an investment in UKML involves a high degree of risk and
prospective investors should read the section in the Prospectus entitled "Risk
Factors" for further information.
END
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