UK Mortgages Ltd: Portfolio Disposal Announcement
THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN
OR INTO OR FROM THE UNITED STATES,
CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN.
8th February 2021
UK MORTGAGES LIMITED
(a closed-ended investment company incorporated in Guernsey with
registration number 60440)
LEI
549300388LT7VTHCIT59
Agreement to Dispose of Two Portfolios Under Revised
Strategy
The Board of UK Mortgages Limited (“UKML”, or the “Company”) and
TwentyFour Asset Management LLP (“TwentyFour”) are pleased to
announce that on Friday 5th February 2021, UK Mortgages Corporate Funding
Designated Activity Company (“UK DAC”) signed agreements under
which, Godiva Mortgages Limited (“Godiva”), a subsidiary of
Coventry Building Society (“Coventry”) has made a commitment to
purchase two buy-to-let mortgage portfolios originated by Godiva
and currently financed within the Cornhill No.6 and Malt Hill No.2
vehicles. Subject to successful completion, the timing of these
sales is expected to coincide with the payment dates in February
and May 2021 respectively. Strong
market conditions have enabled these portfolios to be disposed of
at economics that improve on those indicated to investors in late
2020 and also ahead of anticipated timing for the Cornhill No.6
portfolio.
On the 4th December
2020, shareholders voted overwhelmingly in favour of an
updated strategy for UKML. The first objective was achieved on the
15th January 2021 through
the successful securitisation of existing Keystone BTL loans in the
inaugural Hops Hill No.1 transaction. As the first European RMBS
transaction of 2021, this transaction locked in better funding
levels when compared to those achievable in the fourth quarter of
2020, improving income materially.
The second phase of the strategy aimed to free up capital,
initially through the sale of the two Coventry portfolios, to
enable capital to be returned to shareholders by way of a tender
and to fund the second Keystone investment. The combination is
expected to increase capital efficiency and to continue the growth
trajectory of income. Today’s announcement marks a significant
milestone in achieving this second strategic aim.
On behalf of UK DAC, TwentyFour has simultaneously mandated a
warehouse provider for the second Keystone investment and has
commenced documentation work with an expectation of completing
during March. Material improvements in overall funding conditions
will benefit this new investment over its life.
The sale of the two Coventry portfolios is expected to release
capital enabling two tenders to be carried out, returning an
aggregate at the higher end of the previously communicated £35-40
million range. These tenders are expected to take place following
the payment dates expected to be in February and May respectively.
The Board’s expectation is that the tenders will take place at 75p
per share.
Chairman Chris Waldron commented,
“We are pleased to deliver this important transaction ahead of
schedule providing enhanced certainty for shareholders and further
advancing the updated strategy.”
Douglas Charleston commented,
“This sale represents the first portfolio disposal for UKML. Its
successful conclusion is recognition of the high quality of assets
within the fund. We are pleased to work again with our close
partner, Coventry.”
TwentyFour Asset Management LLP
Douglas Charleston
020 7015 8900
Numis Securities Limited, Corporate Broker
Hugh Jonathan
Vicki Paine
020 7260 1000
Important notice
This announcement has been prepared for information purposes
only, it is not a prospectus.
The distribution of this announcement in certain jurisdictions
may be restricted by law. Persons into whose possession this
announcement comes are required by the UKML, TwentyFour and Numis
to inform themselves about, and to observe, such restrictions.
Recipients of this announcement who are considering acquiring
New Shares in UKML are reminded that any such acquisition must be
made only on the basis of the information contained in the
Prospectus and any supplementary prospectus(es) thereto which may
be different from the information contained in this
announcement. This announcement does not constitute or form
part of and may not be construed as an offer to sell, or an
invitation to purchase, investments of any description, nor as a
recommendation regarding the possible offering or the provision of
investment advice by any party. No information in this
announcement should be construed as providing financial, investment
or other professional advice and each prospective investor should
consult its own legal, business, tax and other advisers in
evaluating any investment opportunity. In particular, an
investment in UKML involves a high degree of risk and prospective
investors should read the section in the Prospectus entitled "Risk
Factors" for further information.