The securitisation incorporates two features which Cynergy Bank says differentiate it from precedent market transactions

Cynergy Bank has completed its debut securitisation, a cash derecognition RMBS transaction, marking a significant milestone in the bank’s funding strategy.

The transaction, named Lovelace CBP 01, is backed by buy-to-let mortgages secured on residential and commercial properties. The deal has enabled Cynergy Bank to achieve capital relief while continuing to serve its core customer base of professional landlords.

The securitisation incorporates two features which Cynergy Bank says differentiate it from precedent market transactions.

The first ensures that lending to customer groups is either fully included or excluded from the transaction, avoiding customers being split across two balance sheets.

The second is a two-year replenishment period, allowing the bank to sell further lending into the structure for customer groups already within the pool.

Cynergy Bank said these features reflect its mortgage model, which is based predominantly on short-term amortising loans of between two and five years, secured across a landlord’s entire portfolio.

Unlike some lenders, Cynergy Bank provides customers with options such as product switches or refinancing at the end of the term, rather than automatically reverting them to a standard variable rate.

The bank said this approach allowed it to structure a securitisation that derecognises loans for capital purposes while still supporting customers as they continue to grow their portfolios.

Lloyds Bank Corporate Markets acted as arranger on the transaction.

Nicholas Fuller, director of group treasury at Cynergy Bank, said: This transaction demonstrates Cynergy Bank’s ability to innovate in securitisation while keeping customer needs at the heart of our approach.

He said: The replenishment period gives us the flexibility to support existing borrowers with further advances and product switches, while delivering capital efficiency and balance sheet optimisation.