Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

Pepper Money Eyes First US Dollar Mortgage-Backed Securities Deal

Specialist lender Pepper Money is considering raising money through its first US dollar-denominated mortgage-backed securities deal. The lender said it wants to diversify its funding sources and attract more investors.

What is proposed

The company is exploring a new securitisation of residential and buy-to-let mortgages under its Polaris brand. The proposed deal could include two types of notes, denominated in US dollars and British pounds.

Bank of America has been appointed as the sole arranger of the transaction, while Barclays, Lloyds, MUFG and Société Générale will act as joint lead managers.

Why it matters

A US dollar tranche would give Pepper Money another source of funding and help it reach a wider group of institutional investors. The company said this would support its plans to continue lending to customers whose circumstances may not fit the criteria of traditional high-street lenders, a segment that includes many buy-to-let borrowers relevant to the UK rental market.

Pepper Money chief financial officer Andy Voss said: "As part of the transaction, we are exploring the potential for our first USD-denominated note issuance, which would broaden our institutional investor base and further diversify our funding platform.

"Investor confidence in our securitisation programme is underpinned by disciplined underwriting, resilient portfolio performance and the scale we have built across the business. This transaction would support our ability to lend responsibly at scale, helping more customers whose circumstances may not fit traditional lending models while advancing our ambition to be a regular and reliable issuer in the capital market."

Relevance for agents and clerks

Continued access to specialist funding for buy-to-let lending matters to UK letting agents and inventory clerks because it underpins the supply of landlords operating outside mainstream lending criteria. A well-funded specialist lender sector supports activity in the rental market, where agents and clerks carry out lettings and inventory work.