Pepper Money is considering raising funds through its first deal for US dollar-denominated mortgage-backed securities.
The specialist lender said it wants to diversify its funding sources and attract more investors.
The company is exploring new securitization of residential mortgages and buy-to-let under its Polaris brand. The proposed deal could include two types of banknotes denominated in US dollars and British pounds.
Bank of America has been appointed as sole arranger for the deal, while Barclays, Lloyds, MUFG and Société Générale will act as joint lead managers.
The US dollar tranche would give Pepper Money another source of funding and help it reach a broader group of institutional investors.
The company said this will support its plans to continue lending to customers whose circumstances may not fit the standards of traditional lenders.
Andy Voss, CFO of Pepper Money, said:As part of this transaction, we are exploring the possibility of issuing our first US dollar-denominated bonds, which would expand our institutional investor base and further diversify our financing platform.
“Investor confidence in our securitization program is supported by the disciplined underwriting, resilient portfolio performance and scale we have built across the business. This transaction will support our ability to lend responsibly at scale, helping more clients whose circumstances may not fit traditional lending models while strengthening our ambition to become a regular and trusted source in the capital market.”
