THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN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.
2 October 2018
UK MORTGAGES LIMITED
(a closed-ended investment company incorporated in Guernsey with
registration number 60440 )
LEI 549300388LT7VTHCIT59
Investment
update
UK Mortgages Limited – Fifth Transaction Completion
2 October 2018
The Board of UK Mortgages Limited (“UKML”, or the “Company”) and
TwentyFour Asset Management LLP (“TwentyFour”) are pleased to
announce the successful completion of the previously announced
forward flow purchase arrangement with Keystone Property Finance
Limited (“Keystone”). Under this investment Keystone will originate
a book of Buy-to-Let (“BTL”) mortgages, into a warehouse financing
structure.
The transaction was originally announced on the 20th
June 2018 and TwentyFour have
subsequently appointed National Australia Bank (rated Aa3/AA-/AA-
with Moody’s, S&P and Fitch) as both financing and swap
provider and Pepper UK as servicer, along with assigning a number
of ancillary roles to counterparties already performing the same
functions for existing UKML transactions. The terms of the
financing agreement, exclusive purchase agreement, detailed
origination criteria, and ongoing loan management all form part of
the arrangement for which documentation has been negotiated
throughout the summer and has now been fully signed.
The transaction provides a second ongoing growth channel for the
Company and is expected to generate a gross Internal Rate of Return
(“IRR”) significantly in excess of 7% (from the date of
purchase).
Importantly, following the initial allocation of part of the new
capital raised in June 2018, further
capital will be raised as required on an incremental basis in
future periods, thereby using capital in the most efficient manner
within the conservative leverage constraints of the Company, and
improving the income contribution. As previously announced, the
Company is also seeking to put in place a revolving credit facility
to give greater flexibility in managing capital, which will further
optimise returns.
Keystone operates in the specialist BTL market focussing on
professional landlords and more complex cases, differentiating it
from existing investments such as those backed by Coventry Building
Society BTL loans, who mainly target individual property investors,
as well as complementing the Company’s existing owner-occupied
forward flow arrangement with The Mortgage Lender. Keystone was
formed in 2007 and has been an active lender in its current form
since 2012, with similar agreements for its previous funding
partners. Keystone’s initial marketing has created an active
pipeline at the point of completing the transaction, and early
interest has been encouragingly strong.
Further information:
TwentyFour Asset Management LLP
Douglas Charleston
020 7015 8900
Numis Securities Limited, Corporate Broker
Nathan Brown
Hugh Jonathan
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.
Certain statements in this announcement are forward-looking
statements which are based on UKML’s expectations, intentions and
projections regarding its future performance, anticipated events or
trends and other matters that are not historical facts. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties and other factors that
could cause actual results to differ materially from those
expressed or implied by such forward-looking
statements. TwentyFour's estimate of the potential gross IRR
for this investment is calculated based on certain scenarios and
subject to certain assumptions. This and any other references
herein to potential future returns or distributions are targets and
not forecasts and there can be no guarantee or assurance that they
will be achieved. Given these risks and uncertainties,
prospective investors are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements speak
only as of the date of such statements and, except as required by
applicable law, UKML undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
The information contained in this announcement is subject to
change without notice and neither the UKML, TwentyFour nor Numis
assume any responsibility or obligation to update publicly or
review any of the forward-looking statements contained herein.
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.