Pepper has bought Dankse's performing mortgage book

M

MrEarl

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Hello,

Surprised to have received a letter from Danske this morning to say that Pepper have bought my Homeloan. Whatever about them being likely to have secured the service contract for whoever bought it, never thought of them as a likely purchaser.

They must have seen it as a chance to get a book of good, low risk customers, who they can potentially sell new top up loans to and then try to reprice the original debt as part of any new agreement.

The deal completes on 15th December or shortly thereafter.
 
Hi MrEarl,

That is a surprise ... where you a cheap tracker ? ... cant see why they want to takeover a bunch of rate return mortgages unless Danske gave them a discount.?
 
Got one of them letters too, for buy to let mortgage... Who are Proteus Funding??? That's who pepper are apparently managing this for
 
Mr Earl

Who actually bought the book? Pepper or Proteus Funding?

This is very important. Pepper managed mortgage books on behalf of others. Proteus Funding might well be open to offers for the early repayment of a tracker.

Brendan
 
I checked on the CRO website and this is a new company set up by Maples & Calder solicitors.

I can't figure out the ownership from their documentation.

Brendan
 
The letter says:
Pepper Finance Corporation (Ireland) DAC will be the new lender in respect of your account(s) from the transfer date and your obligations in respect of your account(s) will be owing to them from that date. Pepper Finance Corporation (Ireland) DAC will hold the benefit of your account(s) on trust for the benefit of Proteus Funding DAC (the Beneficiary).

Pepper Finance Corporation (Ireland) DAC is regulated by the Central Bank of Ireland.

Make of that what you can, cos I'm confused.

Btw I used to be jimmyjoe on this site a long time ago...
 
It's one way of keeping Central Bank happy!

The customers legal contract is with Pepper, a regulated entity, but the beneficial owner is an SPV. Saves the purchaser having to set up any operations here.
 
It was supposed to be a joint venture between Goldman Sachs and Pimco; perhaps that’s what this entity, Proteus Funding, is?
 
Received the same letter today.

As im stuck on their high svr im hoping this will have a positive outcome...
 
Hello,

I am very sorry, I did not read the entire letter this morning as I was in a hurry, I only read the opening paragraph. When I turn over the page, it does indeed refer to Proteus on page 2.

The letter refers to Proteus in the section on Page 2 entitled Who is Pepper Finance Corporation (Ireland) DAC ? It describes Pepper as the new lender and my obligations will be owing to them. It then goes on to say that Pepper Finance Corporation (Ireland) DAC will hold the benefit of my Account(s) on trust for the benefit of Proteus Funding DAC (the Beneficiary).

RedOnion said:
It's one way of keeping Central Bank happy!

The customers legal contract is with Pepper, a regulated entity, but the beneficial owner is an SPV. Saves the purchaser having to set up any operations here.
Click to expand...

Makes sense.

But doesn't there need to be more than just a service contract between Pepper and Proteus, to enable them to state that my obligations will be owing to Pepper (rather than describing Pepper as the collecting agent or similar, for Proteus) ?

Also, if Pepper are the new lender, then what happens if I want a top up - does the new loan come from Pepper, rather than Proteus, given Pepper is the new "lender" ?
 
Absolutely, there is much more than a service contract here.

There is probably a definition of 'lender' in your original Mortgage contract that Pepper will fulfill. By having a licensed entity take on that role allows for such things as top-ups / remortgage etc that a fund wouldn't be able to do.

The 'trust' element is something I haven't seen before. In theory it's no different to 100% of the Mortgages being put into a covered bond and sold to a single entity, except that entity gets more control and all the decision making / strategy decisions. Pepper will need to be delegated decision making rights, etc.

At this stage we don't know who owns Proteus, so it's unclear what their strategy will be. (In theory Proteus could even be owned by Danske still as a vehicle to simplify the sale - the just sell the entity rather than the loans).

All the indications are still that it's Goldman Sachs / Pimco.
 
I have an NIB - Danske LTV tracker, and I received the same letter today.

New lender = Pepper Finance Corporation DAC

Beneficiary = Proteus Funding DAC.
 
I'm reading they paid 95c in the euro for the loans, so it seems no chance of being able to do a deal with them to redeem a tracker early??
 
Hello,

If that 95 cents in the Euro story is true (and I have seen it before now), then it makes no real sense. These funds are after far greater returns than can be achieved buying this portfolio, unless there is clear intention to lend new monies to this customer base, at higher rates (to include expectation that the current loans can be repriced, as part of any new deal).

There are now two discussion threads running on this topic btw (see here for other thread), so perhaps Brendan or one of the Mods might be so kind as to merge the two threads when time permits.
 
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I haven't heard from Danske/Pepper about my offset mortgage. I wonder if this is the case for everyone with this product? If so, are they not included in this portfolio? Were Proteus not interested in taking them over?
 
I got the letter too. Pepper are still going to be the servicer, just for Goldman / Pimco and not Danske. Not a retail bank so another raw deal for Danske customers as there will be no opportunity to get better rates or top-ups etc. They buy the mortgage book at a decent discount on performing loans and just run it down.

Issue for me is that I am stuck in the tracker review. Danske apparently not playing ball with the CBI so completely stuck in limbo. Anyone else on the same boat? Danske won't engage and just hiding behind the ongoing review.

Brendan, all the talk is about the Big 5 banks and all of the announcements today from Pascal. Have you heard anything on the other lenders?
 
Click here for the second discussion thread on this topic.

Hopefully Brendan or one of the Moderators can merge the two threads for us, at some point.
 
You will find that Goldman are paying less than 95c for the book. On a blended rate the book is probably yielding a 3% cash yield (blended SVR / tracker rates). So they buy for say 85, then this yield increases to 3.5%. They put in 30% equity (IRR c. 12%) and borrow the balance at say 3% so their levered IRR is c. 6.7%. So they need to make this return every year on the book. If you discount that over the medium term, there is no economic basis for paying 95c.

Anyone else out there stuck in the Tracker review with the CBI. I am (tracker to fixed to SVR) and Danske have told me to run and jump. CBI still reviewing. Just interested to hear different perspectives and approaches. Other banks (definitely PTSB) have restored trackers in identical circumstances.

Tks.....
 
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