Optimum Credit has raised £256m through a securitisation transaction as it looks to increase its market share within the second charge mortgage industry.

The Cardiff-based lender – which is backed by Patron Capital Partners – hopes to increase its market share of more than 20% and after recently announcing the next phase of its growth through the establishment of a direct-to-consumer lending division.

The securitisation was arranged by NatWest Markets and interest was very strong with the issue being more than twice oversubscribed with a wide range of investors from the UK, Europe and North America.
 
“This is a significant milestone in the development of Optimum Credit and is testament to both the quality of the management team and the business we have built since originating our first loan back in June 2014,” said Sam Marshall, chief executive of Optimum Credit.

“It will allow us to continue the development of our business as we seek to not only increase our prime second lien origination, but also add new product lines.”

Barnaby Brand, finance director at Optimum, claimed that this was the first time that a second charge mortgage lender had accessed the capital markets in this way for 13 years.

“Our monthly lending has doubled in the past year, and this transaction secures the funding that we need for continued growth.”

Jonny Jones, risk director at Optimum, explained that second charge mortgages had become increasingly popular with borrowers in recent years and described its typical borrower as affluent and successful.

“They have built up substantial equity in their home and want to put that money to good use.

“Sometimes they will use our loan to invest in a substantial home improvement project, saving the cost and hassle of moving.

“We also see borrowers releasing funds to purchase a second property, or using the Bank of Mum and Dad to put their children on the housing ladder.”