OREANDA-NEWS. S&P Global Ratings today assigned its preliminary credit ratings to Hawksmoor Mortgages 2016-1 PLC's class A to E notes. At closing, Hawksmoor Mortgages 2016-1 will also issue unrated class F, X, Z1, and Z2 notes, and certificates (see list below).

Hawksmoor Mortgages 2016-1 is a securitization of a pool of first-ranking owner-occupied and buy-to-let nonconforming residential mortgage loans, secured on properties in England, Wales, Scotland, and Northern Ireland. Of the collateral pool, 33.57% was originated in 2007. GE Money Home Lending Ltd. originated 79.89%, igroup Mortgages Ltd. 16.43%, and GE Money Mortgage Ltd. 2.36%. At closing, the issuer will purchase the portfolio from the seller (Junglinster S. a.r. l.) and will obtain the beneficial title to the mortgage loans. The legal title remains with Kensington Mortgage Company Ltd. (KMC).

At closing, the issuance of the subordinated class Z1 and Z2 notes, and part of the proceeds from the sale of the class X notes, will be used to fund the reserve fund to 3% of the class A to F notes' closing balance. The reserve fund will be amortizing, with a floor of 1.5% of the principal balance of the class A to F notes, but is split into a liquidity component and a non-liquidity component.

Our preliminary ratings reflect the timely payment of interest and ultimate payment of principal at maturity on the class A notes, and the ultimate payment of interest and principal on the class B, C, D, and E notes.

KMC will be the mortgage administrator for all of the loans in the transaction, but will subdelegate the general mortgage administration and arrears management to Acenden Ltd.

Junglinster will be the master servicer and will have certain consultation and review rights regarding the performance of the mortgage administrator in its duties.

Our preliminary ratings reflect our assessment of the transaction's payment structure, cash flow mechanics, and the results of our cash flow analysis to assess whether the rated notes would be repaid under stress test scenarios. Subordination and the non-liquidity reserve fund provide credit enhancement to the notes. Taking these factors into account, we consider the available credit enhancement for the rated notes to be commensurate with the preliminary ratings that we have assigned.