The bond will be backed by a $161.7m loan portfolio which originated at Caliber Home Loans before being purchased by Loan Star.
The first sub-prime mortgage-backed bond has been issued since the financial crisis by a US private equity firm, The Times has reported.
The bond will be backed by a $161.7m loan portfolio which originated at Caliber Home Loans before being purchased by Loan Star.
It has been graded by Fitch and DBRS and will be arranged by Credit Suisse.
My Home Move corporate distribution director Mark Snape could see some UK loans originally sold as sub-prime being securitised.
He said: “What happens in America usually follows over here.
“Cerberus and Kensington bought some of the GE Money book and in the past GE Money was classed as a sub-prime lender.
“However those are well performing portfolios – I would imagine they will have the opportunity to be securitised as well.
“There would be an appetite for them as well because they are well performing assets.
“These books are eight or nine years old and they haven’t blown up like people thought they would with the benign interest rate environment.
“LTVs would have gone down and they are completely different types of risk now.”
Sub-prime mortgage securities were viewed as architects of the financial crisis in the US – but Snape doesn’t expect the UK to go overboard.
He added: “I don’t see full sub-prime or self-cert coming back to the UK mortgage market.”
