The securitisation Money Partners Securities 2, which was issued in 2005 containing both first and second charge loans originated by Money Partners and its then-parent company Kensington, has been hit by increased arrears and repossessions above the level expected by the ratings agency.
Moody’s found cumulative losses on the portfolio were equal to 1.11 per cent of the original balance, with 90-day plus arrears standing at 15.40 per cent of the current pool.
It claimed that it was now expecting losses to rise to between 1.5 and 2 per cent of the balance in the coming months, with much of the losses expected to come from the second charge loans.
Both Money Partners and Kensington blamed the move on the credit crunch, which was fuelling the deterioration in the securitisation’s performance.
Bob Sturges, director of communications at Money Partners, said: “Arrears and repossession actions are widely reported to be rising across the board.
"Few lenders are immune from these unwelcome developments, and Moody’s’ comments regarding a small tranche of a total transaction valued at £400 million on issuance should be viewed in this context.”
Derek Lloyd, head of treasury at Kensington, said: “There is increased sensitivity to the performance of portfolios. Given the volume of second charge loans in the deal, losses are still within our initial expectations.
"The cashflow performance of the deal has been strong, and the credit enhancement to the affected notes has increased since the deal was closed.”
