Statement re. signing of new warehouse facility

RNS Number : 2674N

Paragon Group Of Companies PLC

27 September 2012

 



RNS ANNOUNCEMENT                                                                    

27 September 2012

THE PARAGON GROUP OF COMPANIES PLC

Paragon signs additional warehouse funding facility

The Board of Directors of The Paragon Group of Companies PLC ("PGC") is pleased to announce the signing of an additional mortgage warehouse, a £200 million revolving senior secured loan facility provided by the wholesale division of Lloyds Bank. The warehouse facility will be used similarly to the existing £200 million warehouse facility provided by Macquarie Bank, to fund loan originations by the Group's buy-to-let mortgage business. 

The facility, rated by Fitch Ratings, will be available to Paragon Fifth Funding Limited, an independent special purpose vehicle company, and interest will be charged on the amount drawn at three month LIBOR plus 2.75%. As is the case with the existing Macquarie facility, the Group's intention is to use the facility to originate mortgage loans prior to arranging term funding in the mortgage backed securitisation markets, where the Group has considerable experience stretching back for 25 years. The Lloyds Bank facility is structured with a three-year term to permit drawings and re-drawings in its first eighteen months, or up to 24 months, subject to a capital markets refinancing of part of the facility in the first twelve months. The Group successfully concluded a capital markets securitisation of buy-to-let mortgages in November 2011 through its subsidiary company, Paragon Mortgages (No. 16) PLC.

Commenting on the new facility Nigel Terrington, chief executive, said: "We are delighted to announce the new warehouse facility with Lloyds, an organisation with an outstanding track record in the mortgage backed securities markets. This additional facility will be used to fund further buy-to-let mortgage lending in a market that has continued to gain momentum, and we look forward to growing this area of our business."

Negotiations are progressing well for an extension to the Group's existing warehouse facility with Macquarie Bank at the end of the current commitment period in December 2012.

The Group will be announcing its full year results for the 12 months to 30 September 2012 on Tuesday 20 November 2012.

For more information please contact:

Nigel S Terrington     Chief Executive        0207 786 8455

Nicholas Keen           Finance Director       0121 712 2000

Paul Farrow              Fishburn Hedges       020 7544 3040

 

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