Buy-to-let lender cashes in on mortgage debt deal
Buy-to-let lender Charter Court has made a pre-tax gain of £15m from the sale of mortgage debt to Merrill Lynch International.
The £26.5m deal transfers bonds from the Wolverhampton-based company and reduces its risk-weighted assets by £97m. This will enable Charter Court to support new loans.
Ian Lonergan, chief executive of Charter Court, said: “This has been an excellent transaction for Charter Court which demonstrates the investor confidence in the quality of our underwriting processes, underpinned by our track record of growing our loan book without sacrificing asset quality.
“I am also pleased with the delivery of strong net loan book growth and originations in 2017 as we continue our journey post-IPO.”
Charter Court, which went public last September, has seen its share price rise more than 20% in the last seven weeks. Last night’s closing share price of 287p values the company at around £700m.
It will present its full-year results in March, but has revealed that its new loan originations in 2017 totalled £2.7bn – increasing its loan book at December 31 to £5.4bn.
Sebastien Maloney, chief financial officer of Charter Court, said: “This transaction further demonstrates our proactive approach to asset-liability and capital management together with our ability to execute capital markets transactions.”
He added that the impact of recent changes to the standardised approach to credit risk, introduced by Basel III regulations, were expected to be “broadly neutral”.
