The funding, provided by a European asset management firm and a major bank, commits £250 million per annum to be deployed through Landbay’s platform in support of the growth of its UK Buy to Let mortgage book.
The funding line will be provided as a structured warehouse facility split into subordinated junior (15%) and senior (85%) debt. A European asset management firm, who wish to remain unnamed at this stage, is providing the junior debt (mezzanine) in support of the facility, with senior debt provided by a major UK bank.
Mortgages will be originated, underwritten and funded by Landbay, on Landbay paper. Landbay aims to complete the world’s first P2P Residential Mortgage Securitization in 2016.
This a traditional warehouse funding facility and has been provided with a 12-month view for full deployment, commencing 1st June 2015. The facility has been extended given Landbay's strong origination capacity and following its successful 'proof-of-concept' period. The funding positions Landbay to become the first P2P platform in the world to complete a formal Residential Mortgage Securitization, which it aims to complete in 2016 through traditional capital markets.
Landbay has highlighted significant origination opportunities within the UK mortgage market and will be looking to finalise similar partnerships over the coming months.
John Goodall, cofounder and CEO of Landbay said:
“To secure the largest annual credit line yet from institutional financiers for a P2P lender is a major coup for Landbay, especially at this relatively early stage of our development. It provides hard evidence of the robust model we have built, with huge opportunity to scale up. And at an industry level, this milestone provides further proof of how P2P finance is eating into the traditional marketplaces previously monopolised by the Banks.”
