DEAL: Europe’s first insurance premium loan securitisation

Author: | Published: 28 Jun 2017

Back to basics Europe’s first insurance premium loan securitisation

Europe's first securitisation of insurance premium loans provides a template for unprecedented levels of originator freedom in the region.

The £300 million ($379.8 million) deal allowed Premium Credit to diversify its funding sources, giving it the flexibility to tap the public market when conditions are right, while maintaining an existing bank facility.

The assets – loans issued to consumers to help them pay off insurance premiums on claims – were sold to a special purpose vehicle (SPV), which holds them in a master trust. There are two SPVs; one holding the assets to repay the private bank finance and another that will issue notes in the public capital markets. Each one has a beneficial interest in the collective pool of assets.

"The complexity actually gave the company the flexibility it needed, and got the best possible treasury result," said Angela Clist,...