Click here to sign up to the mailing list

Well, I suppose I’ve been dreaming of the day that the Freshly Squeezed newsletter can be editorially justified in leading with a deal rated by ARC Ratings and that day has now come!

‍

With no action to speak of whatsoever in the public European securitization market, it was left for Slatewood Financing to steal the limelight.

‍

Slatewood is a debt finance provider, and a subsidiary of pension fund USS (Universities Superannuation Scheme). Last week, it completed an Equity Release RMBS, Summerhouse 1, backed by a £355.4m portfolio of equity release mortgages originated between 2019 and 2023, acting as the seller and risk retention holder for the deal.

‍

The underlying portfolio was originated by More2Life, a UK mortgage lender specializing in (you guessed it) later life lending. Meanwhile, FiveSigma acted as the arranger on the trade.

‍

As I alluded to earlier, it was rated by ARC Ratings and Moody’s. And that makes it the third equity release RMBS to be publicly rated by ARC Ratings and Moody’s since December 2024.

‍

So far, these equity release trades have all been pre-placed/privately sold and it’s unclear whether the market could mature into seeing fully publicly auctioned deals. In part, I gather that’s because only a small portion of the structure is sold to new investors.

‍

Nevertheless, it would not surprise me in the least if we saw a good few more equity release RMBS deals this year. Regulators have tightened rules around how pension funds and insurers hold equity release mortgages, and so getting a public rating via the securitization structure is becoming a more attractive option.

‍

In addition, UK origination volumes have begun to recover after they fell dramatically in the aftermath of the LDI crisis.

‍

According to the Equity Release Council, in 2022, ERM lending grew to over £6bn, but as rates rose above 5% in 2023, lending in 2023 dropped to £2.6bn and 2024 saw only £2.3bn. In H1 2025, lending is up 10% year-on-year to £1.3bn, meaning there is hope the FY2025 figure could surpass the 2023 mark of £2.6bn.

‍

There’s plenty more to read on Summerhouse 1. My old colleagues at GlobalCapital wrote two pieces last week, which you can read here and here.

‍

And of course, if you want the ARC Ratings report, you can see that here. If you’d like to understand the ARC Ratings methodology better, that’s here too.

‍

Final Word

‍

That’s all from me this week. I think we are getting pretty close to the public market making its long-awaited return.

‍

It would not surprise me in the least if a couple of trades tried to get out after the UK bank holiday next Monday. Who knows, we might even see a couple price before next Friday is out.

‍

My broader sense is that almost every syndicate desk got through what they were supposed to before summer, so I don’t think anyone will be desperate to shoehorn trades in this September. But nevertheless, it will be busy. Expect prime asset classes to lay the groundwork, and funky trades to come later.

‍

Finally, I’m doing one more week of survey results! Please fill it in here – it takes 2 minutes!

‍

Have a great week!

‍

Tom

Click here to sign up to the mailing list

‍