Together prices second RMBS of 2025 at £367 million

Together Financial Services Limited, a UK non-bank lender, successfully priced its second residential mortgage-backed securitisation (RMBS) of 2025, TABS14, raising £367 million. This transaction, backed by first charge owner-occupied and buy-to-let loans, features a weighted average cost of placed notes at 0.81% with a 95% advance rate, and 90% of the issued notes are expected to receive AAA(sf) ratings. The securitisation will refinance assets from the Group’s £1.2 billion Kingsway facility and senior secured notes, underscoring the company's significant capital market activity, which has seen over £5 billion raised or refinanced across ten transactions since July 2024.

Analysis

Together Financial Services has successfully executed a £367 million Residential Mortgage-Backed Securitisation (TABS14), demonstrating robust access to capital markets. The transaction's key metrics are highly favorable, featuring a very low weighted average cost of placed notes at 0.81% and a high 95% advance rate, which signals strong investor confidence in the underlying collateral and the issuer. The high quality of the asset pool, comprising first-charge residential loans, is further underscored by the expectation that 90% of the issued notes will achieve AAA(sf) ratings from both S&P and Fitch. This securitisation is part of a larger, strategic refinancing effort, replacing more expensive capital from its £1.2 billion Kingsway facility and senior secured notes. The deal adds to a consistent pattern of capital market activity, with the company noting it has raised or refinanced over £5 billion across ten transactions since July 2024, reinforcing its position as a leading UK non-bank lender with a sophisticated and diversified funding model. The involvement of major institutions like Lloyds, MUFG, and NatWest as lead managers lends further credibility to the transaction's quality.

Key Decisions for Investors

• Investors in the UK specialty finance sector should interpret this successful, low-cost securitisation as a positive signal for the funding environment, indicating that capital markets remain accessible for non-bank lenders with high-quality assets.
• Fixed-income and structured credit investors should note the tight 0.81% pricing and AAA-ratings as evidence of continued strong demand for UK RMBS, suggesting that similar high-quality new issuance may present valuable opportunities.
• The transaction highlights the health of the UK housing and credit markets, providing a positive data point for investors assessing the credit risk and performance of portfolios exposed to UK residential property.
• Equity investors in the arranging banks like Lloyds (LYG) and NatWest (NWG) should view this as a routine, fee-generating business win that reinforces their capital markets franchise, but not as a material event for their overall earnings.