In a sign of the times, mortgage provider the Paragon Group of Companies has seen its warehouse loan facility with Australian finance house Macquarie Bank renewed at a higher level.
The company, which serves the buy-to-let market in Britain, said the facility has been increased from £200m to £250m. Interest will be charged on the amount drawn at an unchanged rate of three-month London Interbank Offered Rate (LIBOR) plus 2.875 percentage points.
Paragon uses warehouse facilities to originate and aggregate mortgage loans, where they are held for a limited period prior to long-term funding in the mortgage backed securitisation markets. Paragon recently completed its latest securitisation, PM17, amounting to £200m.
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The company more or less went into hibernation during the credit crunch in the second half of the last decade, as the wholesale loan markets dried up, but has been building up steam in recent years, as landlords seek to capitalise on Britain's high house prices, which make it difficult for first-time buyers to get mortgages.
"This extension and increase in the loan facility means that the total warehouse capacity within the group is now £450m and supports our growth plans in the buy-to-let market, where we see continued landlord confidence in the sector, supported by strong tenant demand," said Nigel Terrington, Chief Executive of Paragon.
