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