KBRA Assigns Preliminary Ratings to Lugo Funding DAC
25 Oct 2024 | Dublin
KBRA Europe (KBRA) assigns preliminary ratings to Lugo Funding DAC (Lugo), a static Spanish RMBS securitisation collateralised by restructured, and mostly reperforming mortgage loans (RPL) which are represented by mortgage participations and mortgage transfer certificates.
The underlying provisional collateral consists of a €664.6 million portfolio of seasoned predominantly first lien performing, re-performing mortgages that are secured by residential (98.7%) and commercial properties (1.3%) located in Spain. The loans in the portfolio were originated by Catalunya Banc, S.A. (CX), Ciaxa d’Estalvis de Catalunya (CC), Caixa d’Estalvis de Tarragona (CT), Caixa d’Estalvis de Manresa (CM). CC, CT and CM were merged into CC whose banking business was transferred to CX by virtue of a spin-off on 27 September 2011. CX, with effect from 9 September 2016, was absorbed by and merged with Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). BBVA is the named originator of the portfolio in the transaction and will also be the master servicer.
On or before the closing date, Porta Mina DAC (the Seller) will acquire the economic rights to the mortgage loans represented by mortgage certificates from Miravet S.a.r.l., Compartment 2019-1 and Miravet S.a.r.l., Compartment 2020-1, and sell them to the Issuer at the closing date. Pepper Spanish Servicing S.L.U. (Pepper) will be the primary and special servicer in the transaction. Pepper have a meaningful number of years of experience servicing Spanish re-performing loans and loans deep in arrears.
The notes’ payment priority is strictly sequential under a combined collections waterfall. The interest payments on Class A notes are supported by a LRF which will be funded using part of the proceeds of Class Z notes issued at closing of the transaction.
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