The securitisation also follows the launch of the lender’s first green mortgage last year
Kensington Mortgages has completed its inaugural social bond securitisation at £472m for its owner-occupier home loans.
The bond aligns with the ICMA Social Bond Principles of 2020 which indicates proceeds of bonds should be used to fund new and existing projects with positive social outcomes.
As part of this, Kensington Mortgages contributed towards the United Nations Sustainable Development Goals, a non-profit coalition agenda which sets out targets to improve sustainability.
The securitisation also follows the launch of the lender’s first green mortgage, eKo Cashback, last year.
The issuer Gemgarto SPV will finance the purchase of the loans through a term non-recourse securitisation, which is secured against the properties held in the portfolio and issue the social bonds to investors.
The deal gained from 28 investors across four tranches.
Alex Maddox, capital markets and digital director at Kensington Mortgages, said: We’ve started the new year in a very strong position. With the successful pricing of our first securitisation of 2021, it marks Kensington as the first specialist lender to issue social bonds in the UK residential mortgage backed securities (RMBS) markets.
He said the lender was continuing to introduce environmental, social and corporate governance (ESG) initiatives into its business and provided EPC data for the properties held in the recent securitisation.
Last August, we publicly released our ESG targets for the current financial year for the first time – again making us the first specialist lender in the UK to publish such an initiative, Maddox said.
He said, these will be reviewed on an annual basis so that we can publicly report on the progress we are making in each area – and our targets will help ensure that we are creating a positive impact in both the workplace and wider world.