Oakwood will retain a 49 per cent share of OHL together with the responsibility for managing the platform and existing mortgage book, currently around £858 million, under a series of servicing agreements. Credit Suisse has an option to purchase the remaining shares in OHL in the future.
The acquisition of OHL by Credit Suisse offers the bank a strategic opportunity to further define its participation in the UK mortgage space as a provider of liquidity through whole loan transactions. The sale also represents a simplification of Oakwood’s UK strategy as it moves towards the launch of a separate mortgage lending platform to be led by Michael Bolton, formerly of BM Solutions.
Michael Culhane, chairman and CEO of Oakwood, said: “I am delighted to announce the transaction between OHL and Credit Suisse. Credit Suisse have bought into a highly regarded, regulated mortgage platform with a proven capability to acquire portfolios efficiently from other lenders and an established securitisation program.
“This sale marks the crystallisation of a partnership arrangement between the two organisations stretching back to early 2005, which allowed us to acquire and securitise portfolios from four different lenders. We welcome Credit Suisse as partners in the new platform, and whilst Oakwood will continue to take an active role in managing the existing portfolios, the partial sale will allow us to focus on the launch of our new originator later this year.”
James Bamber, a director at Credit Suisse responsible for the acquisition of the platform and its development within Credite Suisse, said: “We have worked closely with OHL for some time and acquiring an interest in the business is a strategically important step for Credit Suisse. In the short term we look forward to acquiring additional portfolios through OHL and bringing them to the capital markets. Over the longer term, OHL will form an important part of our strategy as we pursue our long term goals in the European mortgage market.
“We have enjoyed an extremely productive relationship with Oakwood over the last 18 months, and it was important for us that Oakwood remained involved with the existing mortgage book in order to guarantee continuity of service to the our borrowers. Going forward we will work together to ensure OHL’s success.”
OHL also announced that its second securitisation, Alba 2006-1, completed on 16 June. The £556 million securitisation comprised around £349 million of near-prime residential mortgage assets, including some prime buy-to-let, from GMAC RFC, and approximately £207 million of near-prime and light adverse assets from Kensington Mortgage Company which were acquired using financing from Credit Suisse.
Alba 2006-1 is OHL’s second securitisation following the launch of the Alba platform in November last year with Alba 2005-1 and brings the total value of assets securitised by OHL to date to just over £858 million.
The Alba 2006-1 assets will be serviced by Homeloan Management Limited (HML), with OHL as the Special Servicer under the same arrangement used for Alba 2005-1. The deal was arranged by Credit Suisse Securities (Europe).
Jason Miller, managing director of Oakwood Homeloans, said: “Our first securitisation in November last year really put us on the map and it continues today to perform in line with forecasts. This second transaction, almost double the size of the first, has emphasised the fact that we have an efficient business model and the ability to bring further issuances to the market.”
Bamber added: “The development of the OHL whole loan trading and securitisation platform from Alba 2005-1 to this securitisation has been excellent. This time round we have doubled the size of the securitisation and halved the amount of energy required to close the acquisitions and securitisation.
“Our ongoing acquisition programme will provide a strategically important alternative for lenders looking to manage their funding and risk. We look forward to developing our existing relationships with lenders in the UK, and to building new ones. As additional portfolios are acquired through the OHL platform I expect our efficiency to increase even further. I look forward to bringing additional issuance to the market through the Alba securitisation program.”
