LONDON, UK: Permanent TSB (PTSB) has agreed the sale of a loan portfolio to Morgan Stanley Principal Funding Inc. Permanent TSB is a wholly owned subsidiary of Permanent TSB Group Holdings.
Morgan Stanley intends to securitise the loan portfolio following completion of the acquisition next year (2022).
Neither the sale nor the securitisation of the portfolio will have any impact on the terms and conditions of individual loan accounts. Existing terms and conditions are unaffected by this transaction, and will continue to apply, a bourse filing notes.
As has been the case with previous loan sale and securitisation transactions undertaken by the Bank, all customers whose loans are included in this transaction will continue to have the same regulatory protections under the Consumer Protection Code (CPC) and the Code of Conduct on Mortgage Arrears (CCMA) after the sale.
The loans within the portfolio will continue to be serviced by PTSB for a period of up to six months. At the end of this period, legal title and loan account servicing will transfer to Pepper Finance Corporation (Ireland) DAC trading as Pepper Asset Servicing, which is regulated by the Central Bank of Ireland (CBI).
This transaction will increase the Bank’s transitional Common Equity Tier 1 (CET1) Ratio by c. 60 basis points once fully completed. This transaction also alleviates the negative impact of calendar provisioning associated with this Portfolio and reduces the Bank’s NPL ratio.
The transaction involves the sale of a pool of loan accounts linked to 1,222 borrowing relationships (a borrowing relationship can be a single borrower or two or more joint borrowers).
In total the portfolio has a gross balance sheet value of c. €390 million. Loans to the value of €223m (57%) were originated as Home Loan (PDH) products and loans to the value of €167m (43%) were originated as Buy-to-Let (BTL) products. 98% of loans are categorised as non-performing by reference to regulatory definitions.
The remaining 2% comprise loan products which originated pre 2009 and which are no longer available to new customers. Typically these are Interest Only or Part Capital & Interest loans where the borrower and the Bank have failed to agree a plan which will ensure the repayment of the outstanding balance (often the original amount which was borrowed) at the end of the agreed loan term. www.permanenttsb.ie