Paragon closes 1.5 bln stg buy-to-let mortgage bond

Business Materials 22 March 2007 23:41 (UTC +04:00)

British lender Paragon on Thursday said it had issued 1.5 billion pounds worth of bonds backed by buy-to-let mortgages that were heavily oversubscribed, with investors unaffected by turmoil in the U.S. subprime mortgage market, Reuters reports.

Banks and other lenders in the United States and Europe have been rattled in recent weeks by deepening troubles in the U.S. housing market, where rising numbers of borrowers with patchy credit histories have defaulted on mortgages.

That has sparked fears that the troubles could spread to other markets, or deter investors from buying mortgage-backed bonds.

But Paragon's deal was priced in line with prime owner-occupied mortgage securitisations, the company said.

"There is no question of investor appetite being affected by any nervousness in the U.S. mortgage market," said Nigel Terrington, chief executive of Paragon.

"It is very encouraging that investors in the UK, Europe and the U.S. understand that buy-to-let differentiates itself by its superior credit quality."

The notes, via the Paragon Mortgages vehicle, were sold in sterling, euros and dollars.

Paragon said earlier on Thursday first-half results should be in line with market expectations, and that it was set for a strong start to its second half.