Tag: UCI

UCI & Concovi Publish a Home Renovation Guide focused on Energy Efficiency Criteria

This is an informative project that describes the keys behind the energy-efficient renovation of properties. The guide is aimed at current and future homeowners as well as real estate professionals.

The guide explains everything from the types of homes based on their energy efficiency to the passive and active measures for the good maintenance of an indoor temperature and for an efficient and effective energy consumption. This translates into savings on household spending, which is especially necessary now that we are all spending more time at home.

The initiative has been launched by the Green division of UCI, the Union of Real Estate Loans, an entity specialising in residential financing, together with CONCOVI (the Confederation of Housing and Rehabilitation Cooperatives in Spain). It is supported by IDAE (the Institute for Energy Diversification and Saving) and the City Council of Barcelona, which have launched the Home Renovation Guide in favour of energy efficiency.

Santander & BNP Put €319M Of Mortgages Up For Sale

19 October 2016 – Expansión

Unión de Créditos Inmobiliarios (UCI), the financial credit company owned jointly by Santander and BNP Paribas, has packaged up 3,850 residential mortgages in Madrid, Andalucía and Cataluña to sell them in the market. To this end, it has structured a securitisation fund amounting to €420 million, of which €319 million will be placed with final investors, a tranche that has been assigned a high quality AA rating by Standard & Poor’s.

It is the third operation that the entity has undertaken in less than a year, as part of the Prado series. Given that UCI is regarded as a special lender, it is not able to approach the European Central Bank in search of financing, and so it is taking advantage of the reactivation of the securitisation market. In total, it has launched three securitisation funds amounting to €1,410 million during this period and a large part of the debt has been sold to investors. On this occasion, UCI is paying competitive prices, of 65 basis points above 3-month Euribor.

According to financial sources, the types of clients involved in this specialist kind of mortgage transfer tend to be those who are unable to access a normal bank, in other words, those who have more risky profiles. But in this securitisation, as S&P has highlighted, the loans are more robust than in standard securitisations because they have lower loan to values (loan amount over appraisal value).

Original story: Expansión (by D. Badía)

Translation: Carmel Drake

Botín Re-Opens The Mortgage Resale Market 8 Years On

10 June 2015 – Cinco Días

The packaging and resale of high-risk, or subprime, mortgages between large financial institutions in the United States was the epicentre of the international crisis that began to unravel in 2007 and which revealed its devastating force one year later, with the bankruptcy of Lehman Brothers.

When that bubble burst, it swept away much of the market for mortgage securitisations, amongst other things. In the case of Spain, which had become the second largest market in Europe and one of the most important on the global stage, the market vanished. But now, it is making a come back.

Unión de Créditos Inmobiliarios (UCI), the financing arm of Banco Santander that specialises in loans for home purchases, has just signed the first operation of this kind to be closed with investors since 2007.

Specifically, at the end of May, UCI placed a €450 million package of mortgages, backed by residential homes. The portfolio, which has been assigned a Aa2 rating by Moody’s, is considered to be a high quality product, since it comprises loans that, on average, cover 53.8% of the values of the homes (loan to value), compared with the limit of 80%, recommended as good practice in the sector.

It is understood, therefore, that the clients that took out these mortgages had (access to) significant resources beyond the financing they requested and that the real estate guarantee behind the loans (homes acquired across the whole of Spain between 2006 and 2013, of which 79% are located in Andalucía, Madrid and Cataluña) would more than cover any possible non-payment.

The sale received a great deal of interest from banks and investment funds, primarily those based in Germany, The Netherlands, France, the UK and Spain, with demand for the package exceeding its value by 1.7x, according to sources close to the operation.

The placement coupon was Euribor plus 0.85 points, compared with the differential of 25 or 30 basis points that was paid in Spain eight years ago. That lower differential is being paid now in the UK and The Netherlands, where the market has never completely closed, but where the differential increased to 150 basis points after the outbreak of the crisis.

Sources at UCI, which placed securitisations amounting to €12,000 million between 1994 and 2007, understand that “since this is the first transaction, a premium must be paid in order to return to the market”, but that it is still an “attractive level”.

The same sources say that the step has been taken as the result of three factors. “Until 2014, there were no transactions involving the public issuance of securitisation bonds in countries on the periphery of Europe. Nevertheless, following an RMBS (residential mortgage-based securitisation) bond issue in Italy, we saw an opportunity for us to issue debt”. They add that the debt purchase program launched by the European Central Bank has, in turn, led to the “revitalisation of the securitisation market”. “Despite that, after eight years of paralysis, bond issues have not been possible until now, since we needed to reach a post-crisis economic situation”.

UCI expects to undertake similar issues in the future and hopes that its example will encourage other entities to do the same.

Original story: Cinco Días (by Juande Portillo)

Translation: Carmel Drake

Sabadell Places €750M 5-Yr Debt Issue At 0.475%

1 June 2015 – Expansión

€750 million debt issue / The bank has placed an issue of 5-year mortgage bonds with a record low yield of 0.475%.

For many financial institutions, the excess liquidity in the market is offsetting the recent increase in volatility that has resulted from the lack of agreement between Brussels and Greece. As a result, debt issues are proving successful.

Friday’s operation by Sabadell is a good example. Just 24 hours after the bank held its AGM, it went to the market in search of financing through the issue of 5-year mortgage bonds, arranged by Barclays, Deutsche Bank, HSBC and Lloyds. It paid a yield of 0.475%, which represents the lowest ever interest rate on a bond issue. Moreover, spreads, or differentials, are returning to pre-crisis levels, given that this yield sits just 12 basis points above the mid-swap rate (the reference rate for fixed rate issues).

“The primary international investors have all taken part in this operation and the participation rate in Germany has been particularly noteworthy. The main investors participating in the issue have been financial institutions, central banks, investment fund managers, insurance companies and pension funds”, said the entity in a statement on Friday.

Balance sheet

Sabadell has been particularly active in the market for this type of issue. Since November last year, it has completed four such transactions, raising €3,100 million in total. “The solvency of Banco Sabadell and its reputation on the international financial markets have undoubtedly been the factors that have contributed to the success of this placement”, it added. The bank wants to take advantage of the decreasing financing costs caused by the recent stimulus measures put in place by the European Central Bank (ECB). “The release of this issue will take place on 10 June and its launch forms part of Banco Sabadell’s non-equity security program, filed with the CNMV”, explain sources at the bank.

In September last year, the financial institution launched a covered bond (the term used for bonds in Europe) purchase program. In total, it has acquired €82,805 million. Moreover, it put in place a securitisation purchase program at the end of last year, and as a result it will close the first transaction involving Spanish mortgages since 2007, with UCI, which is owned by Santander and BNP Paribas. And in March this year, it started to purchase government debt, which has significantly reduced its financing costs.

Improved credit

As a result, credit is being revived once more, which is the main objective of the ECB. In this regard, Josep Oliu, Chairman of Sabadell (pictured above), said at the entity’s AGM last Thursday, that the strong level of competition in the financial markets to secure credit in the context of excess liquidity, represents a threat to the recovery of the banks’ financial results.

Original story: Expansión (by D. Badía)

Translation: Carmel Drake

Santander & Uro Property Revive The Securitisation Market

28 May 2015 – Expansión

Debt issues amount to €2,350 million to date in 2015 / UCI, owned by Santander and BNP, is finalising the first mortgage securitisation in the market since 2007 and the Socimi Uro is closing the first rental income securitisation in Spain, for €1,345 million.

The securitisation market is being revived. Over the last few days, two Spanish companies have gone to the market to raise almost €1,700 million using these structured financing instruments, which have been in disuse since the burst of the subprime crisis in 2007.

Both of the companies are partially owned by Santander: Uro Property, the Socimi that owns one third of the bank’s (branch) network in Spain, closed a €1,350 million securitisation yesterday to refinance its business; and Unión de Créditos Inmobiliarios (UCI), jointly owned by Santander and BNP, is finalising the first mortgage securitisation since 2007, amounting to €342 million.

These two transactions come after a deal closed by Santander in February, involving the placement of a securitisation amounting to €668 million containing loans to finance car purchases granted by the Spanish branch of the French bank Banque PSA, the financial arm of Peugeot Citroën (which has an alliance with Santander). In total, these three transactions amount to €2,355 million.

Innovative debt issues

The largest transaction, the one involving Uro Property, was completed yesterday afternoon. The real estate company – controlled by Santander, CaixaBank, Atisha and Phoenix Life – has refinanced its debt through a securitisation amounting to €1,345 million, over a term of between 22 and 24 years. The most innovative aspect of this transaction is that Uro is securitising the rental income that it receives from the 750 Santander branches that it owns until its rental contract with the bank comes to an end.

The real estate company agreed a fixed rate of 3.348% with investors – mostly insurance companies and fixed income funds – whereby cut its financing cost almost in half from 6%.

Goldman Sachs has led this issue and has been supported by BNP, Santander and CaixaBank. The securitisation will be structured through a company in Ireland.

“It is quite an innovative transaction in the debt market; issues of this type have not been seen before, except for in the UK. With this, we acheive the three main objectives that we set when we took over the reins at Uro, namely to: list the company on the Alternative Stock Market (MAB); sell part of the branch portfolio [the company transferred 381 branches to Axa]; and refinance the debt”, said Carlos Martínez Campos and Simon Blaxland, Chairman and CEO of Uro Property, respectively.

In the case of the issue by Unión de Créditos Inmobiliarios, the operation is expected close this week, for €342 million.

The fund, which issues bonds backed by 3,761 loans in total for the purchase of primary residences, is called FTA RMBS Prado I and matures in 2055. The total volume of this fund amounts to €450 million, but only the highest quality tranche is going to be sold, corresponding to the €342 million issue, which has an ‘Aa2’ rating according to Moody’s, the second highest possible.

To carry out this issue, both Santander and BNP Paribas have conducted several presentations with investors around Europe. The definitive interest rate is expected to be set today.

Asset securitisations received a significant setback after the burst of the subprime crisis, given that it was structured financing that unleashed the crisis in the first place. In Spain, the market also shut down, because even though simpler and more transparent assets were traded here, they were the main source of financing of the credit boom until the burst of the real estate bubble. The outstanding balance of this type of asset exceeded €300,000 million in 2006, according to data from AIAF.

In recent years, the ECB has made significant efforts to revive this market and with this in mind, it started to buy securitisations in Europe in December.

Original story: Expansión (by J. Zuloaga and D. Badía)

Translation: Carmel Drake