Dilosk has now successfully raised around €2.6bn across nine capital market transactions since it was established.
The deal comes just weeks after the lender agreed a deal to acquire a €400m “book” of mortgages from Ulster Bank, among the very last elements of the UK-owned lender’s assets here as it edges towards completing its exit from the Irish market.
The book is of around 4,000 prime residential home loans of former so-called “off-set” mortgages, a structure that allowed borrowers to have lower interest bills off-setting against their savings with the bank.
Since striking that deal at the start of May, Dilosk has raised a further €200m in its ninth asset-backed securitisation deal.
An earlier deal this year raised €400m, backed by owner-occupied mortgages.
The European Central Bank rate hikes of the last two years had squeezed non-banks relative to traditional lenders that rely on retail savers for their funding.
Dilosk’s €400m deal this year heralded a revival of non-banks as players in the mortgage market after the sector was largely sidelined by the ECB-driven spike in interest rates.
Non-bank lenders typically raise fresh funds by borrowing against pools of mortgages.
Their margin is the difference between interest they are charged on the markets and borrowers’ mortgage rates.
The latest deal is backed by a pool of buy-to-let prime residential mortgages originated by ICS Mortgages.
Dilosk said that the deal was significantly oversubscribed with investor bonds approaching around €700m for the €200m of bonds on offer.
The bonds were formally issued by Dilosk RMBS No.9 DA.
They were placed with 21 institutional investors.
Natixis acted as arranger with Bank of America, joining it as lead managers.
The co-founder and CEO of Dilosk, Fergal McGrath, said the deals show the market is open for non-banks.
“The European capital markets remain very strong currently, with investors seeking mortgage-backed bonds from mortgage lenders with a strong issuance track record and solid mortgage-lending capabilities,” he said.
Meanwhile, the lender’s Ulster Bank transaction is working its way through formal clearances, including regulatory approval, and is expected to complete over the coming months.
