The long-term fixed rate mortgage lender said this would lead to it becoming the UK’s first covered bond bank
Perenna has secured a £200 million warehouse facility from ABN AMRO Bank to support its growth in the UK market and work towards the issuance of its first covered bond.
The long-term fixed rate mortgage lender said this would lead to it becoming the UK’s first covered bond bank.
Instead of relying on customer deposits for funding, Perenna wants to fund its lending by covered bonds, similar to mortgage lenders in continental Europe, like Denmark.
Perenna’s proposition, which includes fixed rate mortgages of up to 40 years, is based on the Danish mortgage model, in which longer-term fixes are common.
The lender said that, through the bond, it would connect money investors to the UK mortgage market.
Perenna obtained its full banking licence in September 2023 and launched to the broader market in January.
Earlier this year, the lender cut its mortgage rates to as low as 4.99%.
The rates on its mortgages are fixed for the term of the mortgage and its ERCs are no longer than five years. It offers capital and repayment, interest-only and RIO products.
Perenna plans to issue its first bond this year.
Hamish Peacocke, co-founder and chief capital officer at Perenna, noted: Over £3 trillion of pension and insurance monies have no efficient access to the UK mortgage market; Perenna’s covered bond platform unlocks this. This can only happen through the innovative funding model we have established, which is widely used in European markets, but not here in the UK.
He added: We are delighted to be working with ABN AMRO Bank; they are a perfect partner, given their extensive experience with long-term fixed rate mortgages across Europe, and the facility they have provided will help accelerate our origination and expand our funding capabilities further.