LendInvest completes first £259m securitisation as it looks to further take market share from big banks

Property-focused fintech lending platform LendInvest has securitised £259m of UK prime Buy-to-Let mortgage loans.

The oversubscribed residential mortgage-backed securities (RMBS) transaction is part of a strategy, LendInvest says, to continue to drive down its cost of capital, and continue its move towards the mainstream mortgage market.

In April LendInvest scooped £200m from HSBC to launch residential home mortgages with the firm looking to eventually become a whole-of-market mortgage provider, with short-term bridging as the first step.

Christian Faes, Co-Founder, and CEO of LendInvest said the RMBS transaction was “a significant milestone for LendInvest”.

“This securitisation provides us with funding that is cheaper than if we were a small deposit-taking bank, and proves out our business model and its scalability. We are building a new type of financial services business that can properly take on and challenge the banks in this market,” he said.

“The securitisation received strong support from the market, with new institutions coming into the fold, and buying loans originated through the LendInvest platform,” he added.

LendInvest launched its Buy-to-Let product in late 2017 after initially receiving funding from Citigroup.

The transaction will also, apart from reducing the cost of funding, frees up the fintech lender’s capacity to fund future Buy-to-Let mortgage loans and further take on traditional bank lenders for market share.

The securitisation received an AAA rating (for 83 per cent of the securitisation) from both Moody’s and Fitch. The senior tranche for the inaugural issue was priced at 130bps over the SONIA (Sterling Overnight Index Average).

LendInvest last week unveiled strong financial results in the former of a rise in both revenues and profits - to £4m. Origination volumes also jumped nearly 40 per cent to £747.4m. It originated nearly £130m of Buy-to-Let mortgage loans in the six months to 31 March 2019.