Money Money Money: Finance Ireland Launches €200M Mortgage Bond
Finance Ireland is on the hunt for fresh investment and has launched a €200M bond backed by a portfolio of mortgages to small-scale real estate investors.
It will represent the firm’s first venture into the securitisation market. If the deal goes through it will help bolster an ambitious expansion strategy, according to the Irish Independent, and help provide greater debt liquidity for the Irish property market.
The company’s commercial real estate arm has grown rapidly since its creation in 2016.
The loan book, which is run by Ken Murnaghan, former head of business banking at Ulster Bank and a senior executive in Allied Irish Bank’s corporate banking division, is worth more than €105M and growing.
A securitisation or bond issuance is likely before the end of the year according to Murnaghan.
"Our assumption is that our growth and loan profiles should be securitisation-friendly... there are no benchmark Irish trades for a deal like this,” Murnaghan said.
The group’s backers are the Ireland Strategic Investment Fund and Pimco, the U.S. funds management company. The investors injected €25M and €30M into the company respectively. Murnaghan stressed the "business is capital hungry".
This move comes as yields reach record lows and if the securitisation was achieved it would give Finance Ireland access to cheaper sources of capital and push growth.
First Citizen Finance was the first Irish firm to enter the securitisation market with a €158M bond and Dilosk, a specialist lender, has also issued bonds secured by home loans.