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KBRA Assigns Preliminary Ratings to Cheshire 2025-1 PLC Securitisation

Strategic Insights

— 2 min read

KBRA UK has assigned preliminary ratings to six classes of notes issued by Cheshire 2025-1 PLC, a static RMBS securitisation backed by a portfolio of seasoned non-conforming mortgage loans. The portfolio, aggregating £276.7 million in current balance as of 30 June 2025, consists of loans secured by owner-occupied and buy-to-let properties located in the United Kingdom. The portfolio was originated by 16 different lenders, with Kensington remaining an active lender and sole originator in the UK residential mortgage sector. The notes benefit from a fully funded liquidity reserve fund and a general reserve fund, providing liquidity support and credit support.

Key Takeaways:

  • The Cheshire 2025-1 PLC securitisation is backed by a portfolio of £276.7 million in current balance as of 30 June 2025, consisting of 73.7% owner-occupied and 26.3% buy-to-let properties located in the United Kingdom.
  • The portfolio was originated by 16 different lenders, including legacy platforms such as Kensington, GMAC Limited, and Southern Pacific Mortgage Limited, with Kensington remaining as the sole active lender and originator in the UK residential mortgage sector.
  • The notes' payment priority is strictly sequential, and they benefit from a fully funded liquidity reserve fund and a general reserve fund, providing liquidity support and credit support.
  • The loans in the portfolio were previously securitised under Cheshire 2020-1 PLC (43.2%) and Antigua Mortgages Plc (56.8%), which are still serviced by Pepper (UK) Limited and Topaz Finance Limited, a subsidiary of Computershare Limited, respectively.
  • The static RMBS securitisation is subject to various rating methodologies, including the RMBS Rating Methodology, the RMBS European Rating Methodology, the Country Addendum: United Kingdom Structured Finance, and the Global Structured Finance Counterparty Methodology.
  • The ESG Global Rating Methodology also applies to the securitisation, assessing the impact of environmental, social, and governance factors on the issuance.

Statistics:

  • £276.7 million: The current balance of the securitised portfolio as of 30 June 2025.
  • 73.7%: The percentage of owner-occupied properties in the portfolio.
  • 26.3%: The percentage of buy-to-let properties in the portfolio.
  • 16: The number of different lenders that originated the loans in the portfolio.
  • 43.2%: The percentage of the portfolio that was previously securitised under Cheshire 2020-1 PLC.
  • 56.8%: The percentage of the portfolio that was previously securitised under Antigua Mortgages Plc.

Sources:

  • KROLL BOND RATING AGENCY, LLC (KBRA) - Preliminary ratings assigned to Cheshire 2025-1 PLC securitisation
  • Methodologies: RMBS: European RMBS Rating Methodology, RMBS: European RMBS Rating Methodology, Country Addendum: United Kingdom Structured Finance, and Structured Finance: Global Structured Finance Counterparty Methodology
  • ESG Global Rating Methodology
  • UK Mortgage and Housing Trends: June 2025 Update

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