ELSTREE 2025-2 1ST PLC

Elstree 2025-2 1ST PLC is a securitisation of UK residential mortgage loans originated by West One Secured Loans Limited and West One Loan Limited. The portfolio consists of first-ranking buy-to-let and owner-occupied mortgage loans secured on properties in England, Wales, and Scotland. The transaction includes several classes of floating-rate notes and a Class X note, all of which are listed on Euronext Dublin and linked to Compounded Daily SONIA.

The Elstree 2025-2 1ST PLC transaction represents a high-quality UK RMBS offering backed by mortgages originated by West One Secured Loans Limited (WOSL). WOSL, part of the ENRA Specialist Finance group, has established a strong track record in the specialist mortgage market, focusing on manual underwriting and conservative LTV ratios. The portfolio is relatively fresh with low seasoning (3.77 months) and consists entirely of first-ranking liens, providing a solid credit foundation for the notes. The collateral pool is well-diversified geographically within the UK, though it maintains a notable 30.52% concentration in London. The mix between buy-to-let (50.94%) and owner-occupied (49.06%) loans is balanced, with a low weighted average indexed LTV of 67.40%. Structural credit enhancement is robust, utilising a senior-subordinate structure alongside a General Reserve Fund and a dedicated Liquidity Reserve Fund for the Class A and B notes, which mitigates potential revenue shortfalls. Interest rate risk is managed through an interest rate swap provided by Lloyds Bank Corporate Markets plc, hedging the fixed-rate portion of the portfolio against the SONIA-linked liabilities of the notes. This is a critical feature given that 99.79% of the provisional pool consists of fixed-rate loans. The deal also includes provisions for the purchase of Additional Mortgage Loans via a Pre-Funding Principal Reserve, allowing for portfolio growth post-closing up to a specified limit. The transaction complies with UK and EU Securitisation Regulation risk retention requirements, with the Seller retaining a 5% material net economic interest. The inclusion of a 10% clean-up call and an optional redemption date in October 2029 aligns with market standard expectations for RMBS deals. Overall, the structure provides significant protection for senior noteholders, supported by professional servicing and a veteran management team at WOSL.